Asian Currencies Steady as Dollar Holds, Fed and BOJ in Focus
Most Asian currencies traded within a narrow range on Thursday, while the U.S. dollar steadied after mild overnight gains. Markets are still digesting the Federal Reserve’s interest rate cut and policy outlook.
Japanese Yen in Focus Ahead of BOJ Meeting
The yen held near 146.98 against the dollar after recent gains. Traders are now watching the Bank of Japan’s policy meeting, which concludes on Friday, as well as fresh inflation data due the same day.
The BOJ is widely expected to keep rates unchanged, especially after Prime Minister Shigeru Ishiba’s sudden resignation earlier this month. Still, sticky inflation has raised speculation that the central bank could hike rates again later this year. Core inflation is expected to remain well above the BOJ’s 2% target.
Dollar Steadies After Fed Rate Cut
The dollar index moved little in Asian trade after rebounding sharply from a 3½-year low earlier in the week. The Fed cut interest rates by 25 basis points on Wednesday, as expected, citing growing pressure on the labor market. Policymakers also signaled more cuts ahead but pushed back on expectations for aggressive easing.
Fed Chair Jerome Powell stressed caution, pointing to inflation risks and a cooling job market. Trump-backed governor Stephen Miran was the only dissenter, calling for a deeper 50 bps cut in line with Trump’s push for faster easing.
Mixed Moves Across Asian Currencies
Other Asian currencies showed mixed performance. The Chinese yuan rose 0.1% but eased after touching near 10-month highs, supported by Beijing’s pledge to introduce more stimulus measures.
The New Zealand dollar fell 0.6% after GDP data confirmed the economy contracted in Q2. The Australian dollar slipped 0.1% after hitting a 10-month high earlier this week.
The Indian rupee rose 0.3% but remained under 88 per dollar after record lows earlier in September. South Korea’s won gained 0.3%, while Singapore’s dollar added 0.1%.
Safe havens such as gold and the yen strengthened as concerns about U.S. growth weighed on risk sentiment.
