• The Japanese Yen gains ground due to safe-haven flows amid Middle East tensions.
• Japan's parliament will hold a special session to discuss the BoJ interest rate hike last month.
• Downbeat US PPI data have boosted the odds for a larger Fed rate cut in September.

The Japanese Yen (JPY) extends its gains against the US Dollar (USD) on Wednesday. The USD/JPY pair faces challenges due to rising expectations of the Bank of Japan (BoJ) hiking rates again in 2024. Japan's parliament is scheduled to hold a special session on August 23 to discuss the Bank of Japan's (BoJ) decision to raise interest rates last month. BoJ Governor Kazuo Ueda is expected to attend the session, according to government sources cited by Reuters.

The safe-haven flows might have contributed support for the Yen amid rising geopolitical tensions in the Middle East. The BBC reported on Tuesday that the United States sent a guided missile submarine to the Middle East.

The US Dollar lost ground following lower-than-expected Producer Price Index (PPI) data from the United States (US) released on Tuesday. This has increased the bets for US Federal Reserve (Fed) interest rate cuts. Investors will likely observe the US CPI inflation report on Wednesday, which could offer some hints about the Federal Reserve’s (Fed) interest rate cut path.