Asian forex rises, yen firms

The yen continued to firm after Japanese Prime Minister Sanae Takaichi’s sweeping election win over the weekend, with support coming largely from speculation over government intervention in currency markets

Most Asian currencies rose on Thursday, with the yen pushing higher after recent gains as officials kept up their warnings on potential currency market intervention.

The Australian dollar rose to a new three-year high after comments from the Reserve Bank spurred bets on more interest rate hikes in the coming months.

Broader Asian currencies also firmed.

The yen’s USD/JPY dropped 0.6% to nearly 152.38 yen, reaching its lowest level in three weeks.

The currency continued to firm after Japanese Prime Minister Sanae Takaichi’s sweeping election win over the weekend, with support coming largely from speculation over government intervention in currency markets.

Top currency diplomat Atsushi Mimura on Thursday declined to comment on whether Tokyo had intervened in the yen in recent weeks, and reiterated that the government will closely watch the currency for any outsized volatility.

The Australian dollar’s AUD/USD pair added 0.1% and hit its strongest level since early-January, extending gains from earlier this week.

The currency was boosted chiefly by increased bets that the RBA will raise interest rates further after a 25 basis point hike last week. This came as the bank moves to quash increasingly sticky inflation.

Broader Asian currencies mostly rose on Thursday, as the dollar took only fleeting support from strong nonfarm payrolls data.

Among other units, the yuan’s USD/CNY pair dropped 0.15% and was at its lowest level since May 2023. The yuan remained upbeat after a series of strong midpoint fixes from the People’s Bank.

The won’s USD/KRW pair declined 0.2%, while the Indian rupee’s USD/INR pair shed 0.3% but remained close to 90.5 rupees.

The Singapore dollar’s USD/SGD pair was flat, while the Taiwan dollar’s USD/TWD pair added 0.1%.