Japanese Yen strengthens on Asia FX
2023.01.03 01:29
Japanese Yen strengthens on Asia FX
Budrigannews.com – The Japanese yen surged to a six-month high on expectations of tighter monetary policy on Tuesday, extending gains as markets bet on slower interest rate hikes and a weaker dollar this year.
With a gain of 0.7 percent and a seven-month high of 129.74, the was Asia’s best-performing currency. Since the unexpectedly striking a more hawkish tone than the markets were expecting at the beginning of December, the currency has been on a tear, raising expectations that it may tighten its ultra-loose policy in 2023.
Markets anticipate that the Japanese central bank will maintain its record-low interest rates when it meets on January 18. Be that as it may, any further changes to its yield bend control estimates will be firmly watched.
Increasing expectations that the Federal Reserve will slow down its rate hikes this year led to a rise in broad Asian currencies.
on the hope that the economy will eventually emerge from COVID-related restrictions this year, rose 0.3 percent, and the added 0.5 percent.
The country is also experiencing an overwhelming spike in COVID-19 infections, which, according to analysts, are likely to impede growth in the near future. This comes as Beijing has begun to reduce the majority of its stringent anti-COVID measures.
Additionally, earlier today’s data revealed that China’s economy continues to struggle with an increase in infectious diseases. The nation’s logged a fifth consecutive month of declines.
Southeast Asian currencies with a lot of risk saw big gains. despite data showing that the island state’s nearly halved in the fourth quarter, the increased by 0.6 percent and 0.3 percent, respectively.
The possibility of fewer rate increases from the Fed this year provided significant relief for Asian currencies. As the Fed embarked on one of its most aggressive rate hike sprees in 2022, the majority of regional units experienced significant losses. However, the central bank is expected to temper its hawkish rhetoric in light of indications that inflation in the United States may now be at its peak.
On Tuesday, the and held steady around 103, but they were still close to seven-month lows. This week, major U.S. economic indicators, including those for December and the most recent Fed meeting, are being awaited by markets.
Traders will be keeping a close eye on the meeting to see if the bank plans to slow down the rate at which it raises interest rates this year. Markets anticipate a 25-basis-point rate increase in February from the bank.
More Dollar is falling against Asian currencies
