USD/JPY climbs as risk-on sentiment and a firm US Dollar weigh on the safe-haven Yen. The Japanese Yen (JPY) is weakening against the US Dollar (USD) on Friday as risk-on sentiment and widening interest rate differentials continue to pressure the Yen.

Tokyo inflation eases but remains above target, keeping BoJ rate hikes on the table as USD/JPY reacts to softer data and US durable goods orders loom.

MSCI's gauge of stocks across the globe edged down 0.1%, but remained just below an all-time peak from Thursday. The index is on course for a 1.3% weekly advance, buoyed in large part by optimism for U.S. trade deals with the European Union and China, following an agreement with Japan this week.

The US Dollar rallies for the second consecutive day against the Yen, and approaches 148.00. Strong US data support the Fed's "wait and see" stance and underpin demand for the US Dollar. In Japan, the uncertain political context is likely to deter the BoJ from hiking interest rates further.

The US dollar is fighting a bit in the early hours of Thursday, but at this point in time, there is a serious lack of momentum for the currency. Ultimately, this is a situation where we are possibility seeing a bit of sluggishness due to the summer as well.

US Dollar Japanese Yen, US Dollar Index Futures, Crude Oil WTI Futures. Read 's Market Analysis on Investing.com

The yen strengthened versus the dollar on Monday after Japan’s Prime Minister Shigeru Ishiba said he would carry on as leader even as the ruling coalition lost its majority in the upper house election.

Yen gained further strength as investors increased bets on a Bank of Japan interest rate hike in the near term. The greenback, on the other hand, was last down 0.45% at $98.04 after reports last week suggested that U.S. President Donald Trump was looking to fire Federal Reserve Chair Jerome Powell.