According to Jinshi Data, the yen is expected to rise 2.3% against the dollar this week, the biggest weekly gain since late April and early May. Traders unwound long-standing bets on the yen ahead of key U.S. inflation data, and the global stock market crash also prompted investors to turn to safe assets such as the yen.

The yen has dominated foreign exchange markets this month, surging to a near three-month high of 151.945 against the dollar on Thursday, having fallen to a 38-year low of 161.96 earlier this month.

James Athey, fixed income portfolio manager at Marlborough Investment Management, said the speed of the yen's gains means some consolidation may soon be in the cards. But ultimately, as the shine on risk assets fades, the data and the Federal Reserve hints at rate cuts, the yen will appreciate further.