The yen fell half a percent to a record low against the euro, a near 8-year low against sterling and a one-month low against the dollar on Friday as weak Japanese data cemented low interest rate expectations in Japan.
Japan's core CPI rose 0.2 percent in July from a year earlier, against expectations for a 0.5 percent rise, reinforcing views the Bank of Japan will take time raising rates, after lifting them in July for the first time in 6 years.
The dollar was calm against European currencies as investors awaited a speech by Federal Reserve chairman Ben Bernanke. He is speaking on global economic integration at 1400 GMT but may offer indications as to whether the Fed would leave interest rates unchanged at 5.25 percent next month in the wake of some disappointing US data.
"There were some big revisions to the CPI data which means all CPI reasoning for a Japanese rate hike is pretty much gone - there is a downside risk for the yen as a result of that," said Ian Gunner, head of foreign exchange research at Mellon Financial.
"Bernanke is talking on global matters, he may not say much on US monetary policy." The euro was at 149.65 yen at 1142 GMT, up more than half a percent from the US close but off an earlier record high of 149.80 yen.
The euro has been persistently hitting record highs against the yen in recent weeks, but analysts said a close above 150 yen would accelerate the single currency's gains. The dollar hit a one-month high of 117.28 yen, up over half a percent on the day.
Sterling hit its highest since October 1998 above 221.65 yen , while the Canadian dollar was at its highest in at least 11 years against the yen, close to 106 yen. The euro was steady on the day at $1.2766, having hit a 1-1/2 week low of $1.2747 earlier.
Consumer price data for August from the German states of Saxony, Hesse, Brandenburg and Bavaria on Friday echoed earlier data from North Rhine-Westphalia and Baden-Wuerttemberg in showing cooling inflation in the eurozone's largest economy.
A new calculation method shaved around 0.5 percentage points off year-on-year changes in data for overall Japanese CPI from January, a government official said, while economists had expected a downward revision of 0.2 to 0.3 percent.
A Reuters poll showed eight out of 20 market players and analysts expect the BOJ to raise rates to 0.5 percent by the end of the year from the current 0.25 percent, while two now rule out the possibility of another hike before the end of the fiscal year in March.
"You need financial market volatility or a strong domestic story to help the yen, and we have neither of those," said Chris Turner, head of FX strategy at ING.
Implied volatility of euro/yen options has been hitting record lows in recent days, encouraging investors to put on riskier trades which involve borrowing the yen to buy higher-yielding assets.
The Fed is widely expected to keep rates unchanged at its next meeting in September as signs grow of a US economic slowdown, led by the housing sector. The European Central Bank, which meets next Thursday, is expected to keep raising rates after bumping them up to 3 percent earlier this month, helping to narrow the euro's rate gap with the dollar and improve its yield advantage over the yen.
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