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The Japanese Yen (JPY) kicked off the new week on a weaker note as Prime Minister Sanae Takaichi’s landslide win in Sunday’s election paves the way for further fiscal stimulus. The initial market reaction, however, turns out to be short-lived after Japan’s Finance Minister Satsuki Katayama stepped up JPY intervention warnings and confirmed close coordination with the US against disorderly FX moves. This, along with some follow-through US Dollar (USD) selling, triggers an intraday USD/JPY turnaround of nearly 150 pips from the Asian session swing high, around the 157.65 region.Meanwhile, data released earlier today showed that Japan’s real wages shrank…
Indian foreign exchange traders will watch foreign portfolio inflows this week to see whether the rupee’s rally, sparked by last Monday’s U.S.-India trade deal announcement, could extend meaningfully.In fixed income, bond market investors will monitor demand-supply dynamics, which could prove key in determining the direction of bond yields.The rupee closed at 90.6550 on Friday, up over 1% on the week. The U.S. and India unveiled an interim trade framework on Friday, building on an initial announcement earlier last week. While the breakthrough has lifted sentiment on Indian assets, analysts remain cautious about its impact on portfolio flows. Foreign investors have…
The yen extended a string of recent losses in early Asian trading on Monday after Japanese Prime Minister Sanae Takaichi swept to victory in Sunday’s election, easing the path to further fiscal stimulus. The yen slid as much as 0.3% to 157.72 yen against the dollar, its seventh consecutive day of decline, to reach its weakest level in two weeks.Takaichi is projected to deliver as many as 328 of the 465 seats in parliament’s lower house for her Liberal Democratic Party. Alongside her coalition partner, the Japan Innovation Party, known as Ishin, Takaichi now has a supermajority of two-thirds of…
MUFG Bank analysts Lin Li and Khang Sek Lee note the People’s Bank of China is keeping USDCNY fixings below 7.0000, allowing the Chinese Yuan to act as a stabilizing anchor for Asia FX. Analysts expect subdued CPI to sustain a dovish PBOC stance and see scope for a 10 bps policy rate cut and 50 bps RRR reduction by Q1 if growth disappoints.CNY resilience but growth still soft”We expect the CNY to remain a stabilizing anchor for most regional FX, supported by the PBOC continuing to set the daily USDCNY fixing rate below the 7.0000 level.””If there is any…
Analyst says the 89.80–90.00 zone has now emerged as a strong support base for the rupee against the US dollar. The rupee could find short-term support in the wake of India and the US reaching a framework for an Interim Agreement regarding reciprocal and mutually beneficial trade, with market experts seeing the Indian currency strengthening towards the 89 level against the US dollar. The Indian unit (INR) has depreciated about 5 per cent against the USD since August 2025, when US slapped punitive tariffs on Indian goods.Elara Capital’s economists, in a report, said in near term, they expectUSD/INR reversing direction…
India’s foreign exchange reserves reached another new all-time high in the week ended January 30, according to the Reserve Bank of India’s latest data. Foreign exchange reserves rose sharply by $14.361 billion in the week to $723.774 billion, driven by a jump in gold reserves while foreign currency assets dropped.Over the past few weeks, the forex kitty has been largely in an uptrend. Its previous high was $709.403 billion, touched in the previous week. For the reported week (that ended January 30), India’s foreign currency assets (FCA), the largest component of foreign exchange reserves, stood at $562.392 billion, down $493…
The Euro found some respite on Friday versus its counterpart the Greenback, which enjoyed a short-live rally of just two days, but erased Thursday’s gains on Friday as depicted by the US Dollar Index (DXY). A risk-on impulse weighed on the Dollar’s safe-haven appeal, while an uneventful ECB monetary policy decision on Thursday, left traders leaning onto market mood. The EUR/USD trades at 1.1817, up 0.34%.Euro trims losses near 1.1820 as fading Dollar strength and steady ECB messaging steady the pairThe shared currency is poised to end the week with losses, but its seems the EUR/USD is poised to consolidate…
The Thai Baht (THB) is facing temporary weakness due to election-related uncertainties, softer gold prices, and a firmer USD. OCBC Group Research analysts Sim Moh Siong and Christopher Wong note potential scenarios for the upcoming elections and their implications for the THB, suggesting that a clear outcome could support the currency, while a contested result may pose challenges.Election uncertainty weighs on THB”USDTHB extended its move overnight. Election-uncertainty risk premia, softer gold prices and firmer USD remain some of the near term drivers.””A clear outcome allowing for the formation of majority government is the most positive as economic policies can potentially…
MUFG notes robust Korean export growth, especially in semiconductors, but says KRW has underperformed on heavy foreign equity outflows and AI-valuation concerns. With the Bank of Korea seen at the end of its easing cycle and KRW volatility elevated, MUFG expects choppy trading, though its forecasts show a gradual USD/KRW drift lower through 2026.Equity outflows hit Korean Won”That said, we still think the BoK’s easing cycle has ended given the improving economic fundamental, financial stability risk related to Seoul’s housing market and heightened KRW volatility.””This week, KRW was the underperformer in Asia with 2% depreciation against US dollar given significant…
The US Dollar (USD) saw little movement this week after markets assessed the United States (US) President Donald Trump’s nomination of Kevin Warsh, a former member of the Federal Reserve (Fed) Board of Governors, as the next Fed Chair, and the partial US government shutdown that pushed employment and inflation data to next week. The shutdown was ultimately resolved on Wednesday when President Trump signed a funding bill.The US Dollar Index (DXY) is trading near the 97.60 price zone after hitting two-week highs earlier on Friday. Next week, the US ADP Employment Change four-week average will be released on Tuesday,…