DOLLAR BARGES PAST 161 YEN AND EYES QUARTERLY RISE-A near four-decade high against the troubled currency 

The dollar was headed for a second straight quarterly gain and jumped to a near four-decade high on the battered yen in Asia trade on Friday (June 28), ahead of a crucial U.S. inflation reading.

Neither an overnight drop in U.S. yields nor data showing solid consumer price gains in Tokyo could arrest the downward slide in Japan’s currency, which sank to its weakest since 1986, at 161.155 yen per U.S. dollar.

For the quarter it is down 6% on the dollar and for the year so far it has lost 12% – the largest fall of any G10 currency. At 172.37 yen per euro, it traded at a lifetime low on the common currency.

Low Japanese interest rates have encouraged selling yen for higher-yielding currencies, known as a “carry trade”, even as Japanese yields have started to rise and Japanese officials have warned of another round of currency intervention.

Later in the day traders are keenly awaiting the U.S. personal consumption expenditures price index, the Federal Reserve’s preferred inflation measure and expect annual growth eased to 2.6% in May, its slowest in more than three years.