The weekend saw the yen rising sharply against the dollar. Market participants are watching closely to see if it's a trend that's likely to continue.

The Japanese currency has plunged against the dollar this year, from around 110 yen to just over 150 at one point.

But a major reversal took place late last week, with the yen up by as much as seven yen, to hit 138 to the dollar.
The trigger for that was US inflation data released on Thursday.

And the October consumer price index grew less than expected. Speculation rose that inflation was tapering, and that the Federal Reserve may slow down the pace of its interest rate tightening.
But experts are divided over whether the yen's appreciation will take root.

Sony Financial Group analyst Ogawa Maki believes US inflation has not cooled down yet, and feels the yen's surge was excessive. "The trend of the dollar's appreciation against the yen may be nearing a peak over the mid- to long-term," she said. "But I think it's too early to say that the Dollar-yen will trend downward on the latest CPI alone."

Sugisaki Koichi of Morgan Stanley MUFG Securities has a more bullish take. He says the yen is more likely to turn higher next year, with market traders foreseeing a slowdown or even a halt in US rate hikes.

The yen was trading around 139 yen to the dollar on Monday.