Investing.com — Most Asian currencies moved in a flat-to-low range on Thursday as markets sought more signals on U.S. interest rates from Federal Reserve officials and upcoming inflation data.
The Japanese yen saw some resilience, with the pair pausing its recent decline following somewhat hawkish comments from the Bank of Japan. Traders were also on guard about any further government intervention in the currency markets.
Broader Asian currencies were weak as the dollar rebounded from recent losses this week, as a series of Federal Reserve officials warned that steady inflation is likely to keep interest rates high for longer.
The Japanese yen stops its losses, and the US dollar against the Japanese yen hovers above the 155 level
The USDJPY pair – which inversely represents the strength of the yen – swung around the mid-155 levels on Thursday, halting its recent losing streak.
The pause came after Bank of Japan Governor Kazuo Ueda warned that any inflationary pressures stemming from a weak yen could call for a tightening of monetary policy by the central bank – changing his stance after he said last month that recent declines in the yen had not directly affected the… Inflation.
Ueda's comments were enough to stem losses in the yen, which was weakening even after the Japanese government's apparent intervention in currency markets last week.
However, the March data raised doubts about how much progress the Bank of Japan actually has in tightening policy.
The Chinese yuan trims its losses as imports rise
The Chinese yuan pared some of its gains during the day after data showed China grew more than expected in April, indicating some strength in domestic demand.
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Although the rise in imports also exceeded expectations, the rise in imports led to lower-than-expected growth in China. However, the trade balance grew from the four-month low recorded in the previous month.
While an increase in imports usually bodes poorly for currencies, the yuan was supported by optimism about a potential economic recovery in China, which was supporting domestic consumption.
Dollar stabilizes with Fed spokesmen's comments, inflation data available
Broader Asian currencies were weak, as the US dollar stabilized after a strong rebound this week.
The focus was squarely on more speakers from the Fed on Thursday and Friday, as well as key data scheduled for next week.
Doubts over US interest rates kept most Asian currencies trading in a sideways range on Thursday. The Australian dollar pair rose by less than 0.1%, while the Singapore dollar and South Korean won pairs stabilized.
The Indian Rupee pair moved slightly, but remained within sight of the record highs it set in late April.