A look Upon Asian Markets

Most Asian currencies maintained a narrow range on Tuesday as markets teetered on the edge before a series of key U.S. economic readings, while the Japanese yen hovered near its lowest levels in seven weeks after the Bank of Japan remained pessimistic. The dollar showed some weakness in the Asian session but remained close to its highest level in over a month as traders anticipated a long-term increase in U.S. interest rates. The relative strength of the dollar kept most Asian currencies subdued, as did the possibility of the Federal Reserve postponبing interest rate cuts.

The Chinese yuan was among the few currencies that rose by 0.3% from its lowest level in two months amid recent reports indicating that the People’s Bank of China was selling dollars in open markets to support the Chinese currency. However, expectations for the yuan remained gloomy amid continued pessimism about the Chinese economy.

The yen hovered near its weakest level since early December on Tuesday after the Bank of Japan kept interest rates extremely low and stuck to its cautious policies. The central bank also expects inflation to decline in fiscal year 2024, a scenario that gives it less momentum to immediately tighten its extremely accommodative policies. The Bank did not provide significant signals about the timing of when it plans to start policy tightening. The Bank of Japan, with its inclination towards tight monetary policy, has been a major driver of yen weakness as the gap between local and U.S. interest rates widened over the past two years. It is also widely expected that the Bank of Japan will keep interest rates low in the near term, offering little support for the yen.

Asian currencies remained in quiet trading, and the Australian dollar rose by about 0.5% to recover from its lowest level in seven weeks.

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