On Friday, the yen steadied near a 12-week high against the dollar while Asia-Pacific equity markets stabilized, recovering from their worst session since mid-April the previous day. MSCI’s broadest index of Asia-Pacific shares was only 0.06% lower, after a 1.88% drop on Thursday.

Much of the market weakness stemmed from Taiwan, which had reopened after a two-day typhoon closure, causing its tech-heavy equity index to fall by 3.53% as it caught up with global declines. Japan’s Nikkei eased by 0.12% after an earlier rise, whereas Australia’s benchmark added 0.79% and South Korea’s Kospi gained 0.89%. Hong Kong’s Hang Seng rose by 0.21% while mainland China’s blue-chip index remained flat.

U.S. stock futures pointed to gains following two days of losses, with S&P 500 futures up 0.43% and Nasdaq futures rising 0.53%. Pan-European Stoxx 50 futures added 0.17%.

Positive U.S. economic data overnight showed faster-than-expected growth in the second quarter and cooling inflation, alleviating concerns about an abrupt end to the economic expansion and boosting hopes for a potential Federal Reserve interest rate cut in September. The upcoming release of the PCE deflator, a key Fed inflation measure, was highlighted as a critical event for the week’s trading.

The yen rose 2.5% against the dollar this week, marking its best performance since late April, driven by safe-haven demand and the unwinding of bearish bets. The dollar traded 0.19% lower at 153.67 yen after reaching a low of 151.945 on Thursday. Analyst Tony Sycamore from IG noted that the support level between 152 and 151.80 yen has been strong, with a potential rise to around 155.30 yen ahead of the Bank of Japan’s meeting next Wednesday.

Both the Bank of Japan and the Federal Reserve are set to announce policy decisions on July 31. Market expectations for a 10 basis point rate hike by Japan’s central bank increased to 67.2%, up from 40% earlier in the week. While a Fed rate cut next week seems unlikely, a September reduction is fully priced in.

In the currency markets, the euro rose 0.13% to $1.0857, and the pound increased by 0.11% to $1.2864. Oil prices saw slight gains due to stronger-than-expected U.S. economic data, which raised expectations for increased crude demand. Brent crude futures for September rose by 12 cents to $82.49 a barrel, and U.S. West Texas Intermediate crude for September increased by 13 cents to $78.41 per barrel.