SINGAPORE, July 26 Reuters The yen was poised for its strongest week in nearly three months on Friday as traders unwound longheld bets against the frail currency ahead of crucial U.S. inflation data that could cement rate cut expectations.

The yen has dominated the currency markets this month, surging to a near threemonth high of 151.945 per dollar on Thursday after starting the month languishing at a 38year low of 161.96 per dollar.

On Friday, the yen was last at 153.66, set for a 2.5 rise for the week, its biggest weekly gain since late Aprilearly May, as a global stocks selloff also drove investors towards safe assets, including the yen.

The large move follows suspected interventions by Tokyo in early July that wrongfooted traders and led to an unwinding of profitable carry trades, in which traders borrow the yen at low rates to invest in dollarpriced assets for higher returns.

I think the speed of the yen rally means we are probably due some consolidation pretty soon, said James Athey, fixed income portfolio manager at Marlborough Investment Management.

But ultimately with the shine coming off risk assets and data and Fedspeak suggesting cuts are coming I still feel the yen has further to appreciate.

Investor attention on Friday will focus on U.S. personal consumption expenditure data, the Federal Reserve39;s favoured measure of inflation. The PCE data is expected to come in at 0.1 on a monthly basis.

The Fed meets next week and is expected to stand pat on…