Asian currencies edge lower as dollar near 13-month high

The dollar’s advance was reflected across the region, with the KRW/USD among the weakest performers

Most Asian currencies edged lower on Wednesday as the U.S. dollar hovered near a 13-month high, supported by continued demand for safe-haven assets following a sharp selloff in international technology stocks.

The dollar’s advance was reflected across the region, with the KRW/USD among the weakest performers. USD/KRW rose 0.5% to 1,539.9 despite a rebound in Korean equities.

Yuan weakened after the People’s Bank of China set its daily midpoint weaker for a fourth consecutive session, signalling greater tolerance for currency flexibility as the dollar firmed. USD/CNY rose 0.2%, while the offshore USD/CNH pair added 0.2%.

The yen remained near multi-decade lows, with USD/JPY holding around 161.6. The currency showed little reaction to a summary of opinions from the Bank of Japan’s June meeting, which revealed some policymakers favoured additional interest-rate increases after the central bank lifted rates to 1.0%, the highest level in more than three decades.

Markets also remained on guard over any currency market intervention by the Japanese government, especially as the yen remained at levels that had drawn intervention in the past.

Elsewhere, TWD/USD weakened 0.1%, with investors awaiting industrial production data for further clues on the health of the island’s export and semiconductor sectors.

The Australian dollar’s AUD/USD pair was little changed after data showed underlying inflation accelerated to 3.6% in May, exceeding expectations and reinforcing the case for the Reserve Bank of Australia to keep interest rates higher for longer.

In Southeast Asia, USD/THB climbed 0.6% before the Bank of Thailand’s policy decision. Economists broadly expect the central bank to leave rates unchanged, with policymakers having repeatedly signalled a willingness to look through supply-driven inflation pressures. Recent data showing inflation eased in May has further reduced pressure for near-term tightening.