Asian Fx Markets Remain Muted On Rate Fears

Asian Fx Markets Remain Muted On Rate Fears by Andrew Blumer last updated on June 21, 2024

Majority of the Asian currencies showed little movement on Friday as a lot of central bank meetings are scheduled for the next week. The Japanese Yen remained an outlier as it flexed its muscle against the USD on strong inflation data.

Although the JPY has shown some gains, it still remains depressed at the 1-year low due to the BoJ's long-term monetary policy which is at a divergence with the rest of the world.

Japanese Yen Trades Above 150.00

For now, the JPY is trading above 150.00 as the market players are waiting for the Bank of Japan. The Japanese Yen has gone up by 0.1% after the release of the consumer inflation data. The data showed an increase in the capital of Japan which was way higher than the forecasts.

According to experts, the recent reading will allow the BoJ to finally make a hawkish once. In fact, the upcoming BoJ meeting on Tuesday is expected to deliver a surprise.

For the most part, the BoJ will likely keep the rates at historically low levels but will likely change its curve control policy. The inflation situation in Japan has also changed as the BoJ is now trying to counter sticky inflation amid a weakened Yen.

If we look at other Asian currencies, South Korea's Won is up by 0.3%, while the Australian dollar has also secured 0.3% gains.

The RBA's governor recently commented on how the higher inflation isn't that big of an issue. This sent the AUD lower, as now the markets are accounting for the November rate hike.

Similarly, the Indian Rupee has also gained 0.2% on accounts of a weakness seen in the oil prices. Despite the recovery, the Indian currency is still weak against the USD.

It seems that most of the Asian currencies have shown little to no movement as important central bank meetings are scheduled for next week.