The U.S. dollar weakened against its major counterparts in the Asian session on Friday. In contrast, the Japanese yen strengthened against its peers, as investors are upbeat about the rising prospects of an interest rate cut by the U.S. Fed next week, and probability of a series of interest rate cuts before the end of the year, in the wake of recent data on U.S. inflation.

While the data has seemingly reduced the likelihood the Fed will cut rates by 50 basis points next week, rates are still expected to be notably lower by the end of the year. CME Group's FedWatch Tool currently suggests rates will be lower by at least a full percentage point following the Fed's December meeting.

Gains across most sectors led by miners and energy stocks amid spiking commodity prices, also led to the upturn of investor sentiment.

In the Asian trading today, the U.S. dollar fell to nearly a 9-month high of 140.65 against the yen, from yesterday's closing value of 141.79. The greenback may test support near the 139.00.

Against the euro, the pound and the Swiss franc, the greenback slid to a 4-day low of 1.1091, a 1-week low of 1.3151 and a 2-day low of 0.8486 from Thursday's closing quotes of 1.1074, 1.3123 and 0.8510, respectively. If the greenback extends its downtrend, it is likely to find support around 1.11 against the euro, 1.33 against the pound and 0.83 against the franc.

Against the Australia and the New Zealand dollars, the greenback slipped to 1-week lows of 0.6733 and 0.6194 from Thursday's closing quotes of 0.6722 and 0.6182, respectively. On the downside, 0.68 against the aussie and 0.62 against the kiwi are seen as the next support levels for the greenback.

The greenback edged down to 1.3565 against the Canadian dollar, from yesterday's closing value of 1.3580. The currency is likely to challenge support around the 1.34 region.

The yen rose to 2-day highs of 155.96 against the euro and 184.95 against the pound, from yesterday's closing quotes of 157.02 and 186.07, respectively. The yen is likely to find resistance around 154.00 against the euro and 179.00 against the pound.

Against the Swiss franc, the yen advanced to a 9-month high of 165.73 from Thursday's closing value of 166.58. On the upside, 164.00 is seen as the next resistance level for the yen.

Against Australia, the New Zealand and the Canadian dollars, the yen climbed to 2-day highs of 94.62, 87.00 and 103.62 from Thursday's closing quotes of 95.31, 87.65 and 104.40, respectively. The yen is likely to find resistance around 93.00 against the aussie, 85.00 against the kiwi and 101.00 against the loonie.

Looking ahead, U.K. inflation expectations survey results and Eurozone industrial production figures for July are due to be released in the European session.

In the New York session, U.S. export and import price indices for August, Canada wholesale sales data for July, U.S. University of Michigan consumer sentiment index for September and U.S. Baker Hughes oil rig count data are slated for release.

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