Yen edges up as traders push back Fed rate hike bets

The yen was 0.2% stronger against the U.S. dollar at 159.055 yen, on track for a second straight day of modest gains against the greenback but still firmly within its trading range of the past week, after data released Monday showed Japanese GDP for the second quarter expanded at an annualised 1.1%.

"The details were a mixed bag," Capital Economics analysts wrote in a research note. "GDP expanded at a decent pace in Q2 and with the government still limiting the pass-through from higher energy prices," they wrote, while a jump in government consumption "suggests that Takaichi's expansionary fiscal policies are starting to have an impact."

The euro was flat at $1.1573, while the British pound was up 0.1% at $1.3546. Both the Australian dollar and its kiwi counterpart were level at $0.7085 and $0.5891 respectively.

Soggy U.S. data, including non-farm payrolls and gauges of price inflation for consumers and producers, have doused investor expectations of rate hikes from the Fed this year, with few clues expected from the U.S. central bank until the Jackson Hole symposium between August 27 and 29.

interest rates at their next two-day meeting ending on September 16, up from a 47.6% chance a month ago, according to the CME Group's FedWatch tool.

Oil prices fluctuated between gains and losses, while U.S.-Iran talks to resolve the Middle East conflict remain stalled. Brent crude edged down 0.1% at $88.48 a barrel as President Donald Trump told Americans to prepare for continued high fuel prices as a result of the war, while Iran called on the U.S. to accept defeat. Shipping traffic through the Strait of Hormuz remains a trickle.

Against the Chinese yuan, the U.S. dollar was flat at 6.7428 yuan in offshore trade ahead of activity data due for release later on Monday.

In cryptocurrencies, both bitcoin and ether were down 0.3% at $62,854.48 and $1,874.80 respectively.

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