Yen headed for strongest week in a month, dollar flat ahead of payroll data

The Japanese yen strengthened to its strongest week in over a month, with the dollar remaining flat ahead of US payroll data release. The Japanese currency surged to as high as 155.25 per dollar in morning trade, near the 155.20 high reached last month following a Bank of Japan intervention. It later settled at 155.71, indicating a potential 2.5% gain this week, the biggest weekly increase since late July.

Analysts suggest the yen's rise is driven by expectations of a more hawkish Bank of Japan at their September 17-18 meeting. Meanwhile, the dollar index remained steady at 99.01, while the euro and British pound held steady at US$1.1625 and US$1.3527, respectively. The market now focuses on upcoming economic data, including nonfarm payrolls and CPI inflation figures, which could impact the Federal Reserve's interest rate decisions.