The Japanese yen (JPY) has strengthened against the US dollar (USD), likely due to traders reducing their carry trade positions ahead of the Bank of Japan's (BoJ) policy meeting next week.

Additionally, investors are anticipating that the Bank of Japan will reduce its bond purchases after a long period of doing so in order to scale back its ongoing monetary stimulus policies.

On the other hand, the US dollar might strengthen as the latest US Purchasing Managers' Index (PMI) data revealed that private sector activity expanded at a faster pace in July, underscoring the resilience of US growth despite higher interest rates.

Source: Fxstreet