Precise Investors Editorial Team
Broader Asian currencies were largely muted in anticipation of more economic cues this week
Most Asian currencies moved in a tight range on Tuesday.
The yen firmed slightly after strong wage income data. But the currency remained pinned near 40-year lows, with markets watching for any more currency market intervention from Tokyo.
Caution over renewed attacks in the Strait of Hormuz also weighed on markets, with oil prices rising after reports of strikes on vessels in the waterway.
The yen’s USD/JPY pair dropped nearly 0.2% on Tuesday, with the currency firming after government data showed wages grew for a fifth straight month in May.
But the pace of growth did slow from the prior month, as rising inflation, due to disruptions stemming from the Middle East war, weighed on consumer spending.
Still, the print pointed to sustained Japanese wage growth– a trend that the Bank of Japan has signalled is necessary for raising interest rates further. The central bank hiked rates by 25 basis points in June and said it was prepared to hike rates further.
But this provided fleeting support to the yen, which remained close to lows last seen in 1986. Sustained weakness in the currency kept markets on edge over any more intervention by Tokyo, especially as several officials warned of overspeculation against the yen.
Broader Asian currencies were largely muted in anticipation of more economic cues this week. The yuan’s USD/CNY pair was flat with focus on June inflation data due on Thursday.
The Australian dollar’s AUD/USD pair dropped slightly, while the won’s USD/KRW pair declined 0.4% amid heavy selling in equities.
The Singapore dollar’s USD/SGD pair was flat, as was the Indian rupee’s USD/INR pair.
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