Dollar hits 2-1/2-month low amid trade concerns

The yen rose to a 2-1/2-month high on Friday on a jump in Japanese inflation, while the dollar was set to post a third straight weekly decline as traders increasingly believe that the tariff rhetoric at the start of Donald Trump’s second term was mostly bluster.

The yen broke resistance at 150 against the dollar overnight and rose to 149.285 against the dollar in Asian morning trade after core inflation rose at its fastest pace in 19 months in January.

The euro rose 0.8 percent overnight and was steady in Asia at $1.0498 as traders awaited elections in Germany this weekend. Opinion polls suggest a conservative coalition will win.

The dollar suffered broad losses as investors who had built large long positions in anticipation of a trade war held off, amid Trump’s evasiveness on tariffs.