The dollar/yen was down 0.07 percent as of 08:00 GMT on Friday to trade at 109.13, as the greenback showed a moderate recovery despite an ongoing geopolitical crisis in Asia.

Japanese markets will remain closed on Friday as the country celebrates Mountain Day. In the United States, attention is entirely directed to the release of July’s CPI at 12:30 GMT.

The data front hasn’t been supportive in the previous session, with the producer price index showing a 0.1 percent reduction last month, missing expectations for a 0.1 percent build.

In a separate report, the US Labor Department said people filing for unemployment benefits rose by 4,000 in the week ended August 4 to a seasonally adjusted 244,000. Market analysts had forecasted a 240,000 reading.

The US dollar index, which tracks the greenback against a basket of six major rivals, was trading at 93.38 by the time of this writing, adding 0.08 percent.

Today’s inflation report will be key to define a direction on expectations for further monetary policy tightening from Federal Reserve. A rising inflation environment would support the US central bank to continue hiking interest rates this year.

According to Fed funds tracked by CME Group’s FedWatch tool, traders are currently pricing in a 42.2 percent probability of a third 25 basis points rate increase by December.

Despite a break below the 109.50 support, the pair is likely to soon restart bullish movements and move to the 110.25 resistance. It will of course depend on inflation data. For the time being, betting on short term sells seems as a good way to go, but careful with signs of a rebound.