Investing.com–Most Asian currencies were little moved on Thursday as traders largely maintained a preference for the dollar ahead of more key economic signals from the US.
There was also a strong focus on possible government intervention in the Japanese yen, which shot past levels that would have invited government intervention in May.
Sentiment towards Asian markets was limited by uncertainty about US interest rates, while concerns about China also weighed on the back of weak economic data.
Share prices fell slightly in Asian trading but were close to a two-month high on Wednesday. The focus this week has been squarely on numbers – the Federal Reserve’s favorite inflation gauge – and on the first presidential debate, which will take place later on Thursday.
Japanese Yen Weak, USDJPY Crosses Intervention Threshold
The Japanese yen strengthened slightly on Thursday, with the pair down 0.2%. The yen’s strength was partly driven by stronger-than-expected May data.
But the pair breached the 160 yen level in overnight trading, which traders had seen as the threshold for more government intervention.
The USDJPY’s break from 160 in May had led to major interventions in the currency markets, where the government sold large amounts of dollars to buy the yen and support the currency.
Japanese officials continued to warn this week that they would respond to any “excessive” moves in the currency markets. But it remained unclear when and how they planned to intervene.
Chinese Yuan Vulnerable, USDCNY At Seven-Month High
The Chinese yuan pair hovered at a seven-month high on Thursday following a seventh straight weak midpoint fix from the People’s Bank of China.
The yuan has faced increasing selling pressure in recent weeks, mainly on fears of a trade war with the West after the European Union imposed tariffs on imports of Chinese electric vehicles.
Sentiment towards China was further deteriorated by data showing growth in the country slowing in May.
The broader Asian currencies remained within a tight range. The Australian dollar pair rose 0.1% after rising sharply on Wednesday as warmer-than-expected inflation raised expectations for a rate hike.
The South Korean won pair fell 0.2% after a sharp rise this week, while the Singapore dollar pair fell 0.1%.
The Indian rupee’s pair was flat after coming close to record highs this week.
