Asian currencies ended the year with a quiet performance amid thin year-end trading, as investors preferred to wait and watch. The U.S. dollar saw a slight rise following previous declines. Despite the calm, most regional currencies achieved annual gains, benefiting from the dollar’s weakness throughout the year and expectations of future easing in U.S. monetary policy.
In this context, the Japanese yen remained largely stable compared to other Asian currencies, finishing the year with negligible changes against the dollar. This was due to Japan’s slower-than-expected monetary tightening, despite the Bank of Japan raising interest rates twice during the year as a gradual step away from ultra-loose policy. These moves, however, were insufficient to strongly support the yen, causing it to lag behind several other Asian currencies.
Meanwhile, some regional currencies benefited from improved global risk appetite and reduced dollar pressures, whereas the yen remained constrained by domestic factors, including the pace of tightening and interest rate gaps relative to major economies. As the year closes, the yen’s stability reflects a balance between domestic policy support and ongoing external pressures, making its future path dependent on Japanese monetary policy developments and global dollar movements.
Stay informed about global markets through our previous analyses. and Now, you can also benefit from LDN company services via the LDN Global Markets trading platform.
