The Japanese yen has seen a two-day rally on Thursday, bolstered by data released on Wednesday indicating a slowdown in US inflation, Reuters reported. This comes as the dollar stabilises against other currencies following a significant decline the previous day. The dollar fell one per cent against the yen on Wednesday and dropped another 0.38 per cent on Thursday to reach 154.32. It had briefly dipped to 153.6 before Japanese growth data weakened the yen's appeal. The yen has depreciated 9.5 per cent this year due to the Bank of Japan's (BOJ) loose monetary policy. Higher US interest rates have attracted investment to the dollar. The yen is sensitive to interest rate differentials. The dollar index rose 0.11 per cent to 104.32 on Thursday after a 0.75 per cent decline on Wednesday. Investors are betting on Federal Reserve's rate cuts, predicting two by year-end. Notably, US inflation experienced a slowdown to 0.3 per cent in April, a decrease from 0.4 per cent in March and falling short of the anticipated 0.4 per cent reading. The data released on Wednesday also revealed that year-on-year core inflation, which excludes volatile food and energy prices, dropped to a three-year low of 3.6 per cent.