(fxcue news) - The Japanese yen weakened against other major currencies in the Asian session on Thursday amid risk appetite, as traders react to a key U.S. inflation report that showed a bigger than expected increase in core inflation, raising expectations for a quarter-point rate cut at the U.S. Fed's monetary policy meeting next week. The data seemingly reduced the chances of the Fed cutting interest rates by 50 basis points but is still expected to continue lowering rates in the coming months. Following the report, CME Group's Fed Watch Tool is indicating an 83% chance of a quarter point rate cut and just a 17% percent chance of a half-point rate cut. The Bank of Japan board member Naoki Tamura signaled that the path towards ending the easy policy is still very long. The Bank of Japan must raise its policy interest rate to "at least around 1 percent" as soon as the second half of next fiscal year to avoid upside risks to inflation, the BOJ Tamura said. In economic news, data from the Bank of Japan showed that the Japan's producer price inflation eased in August from an 11-month high in July. The producer price index climbed 2.5 percent year-over-year in August, slower than the 3.0 percent rise in July. The expected increase was 2.7 percent. On a monthly basis, producer prices dropped 0.2 percent in August, reversing 0.5 percent rise in July. Further, this was the first decrease in ten months. In the Asian trading today, the yen fell to 2-day lows of 157.52 against the euro, 186.64 against the pound and 143.04 against the U.S. dollar, from yesterday's closing quotes of 156.74, 185.65 and 142.35, respectively. If the yen extends its downtrend, it is likely to find support around 161.00 against the euro, 192.00 against the pound and 147.00 against the greenback. Against the Swiss franc, the yen edged down to 167.59 from Wednesday's closing value of 164.04. The yen is likely to find support around the 170.00 region. Looking ahead, the European Central Bank is slated to announce the outcome of its policy meeting in Frankfurt at 8.15 am ET. The central bank is widely expected to cut its key interest rates by 25 basis points amid falling inflation and economic indicators signaling a weaker outlook. Following the monetary policy decision, the ECB Chief Christine Lagarde will hold the press conference at 8.45 am ET. In the New York session, Canada building permits for July, U.S. PPI for August, weekly jobless claims, U.S. Federal Reserve's budget statement for August and U.S WASDE report are slated for release.