The dollar gained 0.2% to 150.42 yen, having already crossed the 150 yen level for six successive sessions
The dollar rose broadly on Tuesday and firmed above 150 yen on growing expectations of higher-for-longer U.S. rates, contrasting with a recession in Japan and market doubts about a near-term exit from the country’s ultra-easy policy.
China grabbed traders’ attention early in the day after a big reduction to its benchmark reference rate for mortgages. While the reduction comes on top of other attempts to stimulate credit demand and ramp up the property market, the yuan struggled near a three-month low as investors say more policy support is needed to boost fragile confidence.
The onshore yuan was last slightly higher at 7.1982 per dollar, after having slid to its lowest since November earlier during the session. Dollar selling from China’s major state-owned banks on Tuesday to stem the yuan’s drop helped cap its losses.
The offshore yuan sat at 7.2089 per dollar.
It is great to see the news. It is a necessary first step to remove debt burden, stimulate long term investment, and boost stock market confidence, according to Dan Wang, chief economist at Hang Seng Bank China.
In the next step, we will see if policymakers will continuously lower rates by big amount, one time big cut is not enough to reverse market expectation, Wang added.
The Aussie, often used as a liquid proxy for the yuan, dropped 0.15% to $0.6530, while the New Zealand dollar shed 0.19% to $0.61385, as the move from China failed to substantially boost investor optimism.
In the wider market, the dollar gained 0.2% to 150.42 yen, having already crossed the 150 yen level for six successive sessions and prompting warnings from Japanese officials in a bid to stabilise the currency.
