The Japanese yen surged to around 146 per dollar, it's strongest in three weeks, as the dollar weakened on rising bets for US rate cuts this year. The dollar index slipped to 97.6, a two-week low, after softer US inflation data and signs of a cooling labor market bolstered expectations for a September Fed cut, with some traders even eyeing a half-point move. The figures also eased concerns that President Trump's tariffs are fueling inflation. Meanwhile, the Bank of Japan is under pressure to scrap an inflation gauge tied to domestic demand and wage growth, which has been a hurdle to further tightening.

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