Investing.com– Most Asian currencies moved little on Tuesday, tracking a steady dollar as traders remained largely focused on upcoming U.S. inflation readings that are likely to factor into the outlook for interest rates.
The Japanese yen was also a point of focus, as sustained weakness in the currency put traders on guard over any more potential intervention by the government.
Most regional currencies were nursing recent losses against the dollar, as traders remained largely biased towards the greenback ahead of more cues on U.S. interest rates.
Japanese yen on intervention watch as USDJPY crosses 156
The yen’s pair, which is inversely representative of strength in the currency, rose 0.1% on Tuesday and was trading well above 156 yen.
The pair had recouped a bulk of its losses made earlier in May, when the government was seen intervening in currency markets on two separate occasions.
While traders now saw 160 yen as the new line in the sand for government intervention, USDJPY’s rapid ascent, despite the threat of intervention, sparked fears that the government may intervene sooner.
Japanese data showed factory inflation remained largely subdued in April, pointing to little inflationary pressure on the Bank of Japan to keep tightening policy.
Chinese yuan inches lower on property market jitters
The Chinese yuan’s pair rose 0.1%, as sentiment towards China soured after another major property developer- in this case Agile Group Holdings Ltd (HK:)- defaulted on its bond payments.
The default largely offset some optimism over improving inflation in China, as well as Beijing’s recent unveiling of plans for its massive, 1 trillion yuan ($138 billion) bond issuance.
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A prolonged slump in the property market has been a key point of pressure on the Chinese economy, despite repeated efforts from Beijing to support the sector. A slew of major Chinese cities had relaxed restrictions on home buying in the past two weeks.
Dollar steady with PPI, CPI data on tap
The and rose slightly in Asian trade, as traders remained biased to the greenback ahead of inflation readings in the coming days.
data is due later on Tuesday, while the more closely-watched reading is due later on Wednesday. Both readings are likely to factor into the outlook for U.S. interest rates, with any signs of sticky U.S. inflation presenting more headwinds for Asian currencies.
Most regional units were muted on Tuesday. The Australian dollar’s pair fell 0.1%, while the South Korean won’s and the Singapore dollar’s rose 0.2% and 0.1%, respectively.
The Indian rupee’s pair remained close to record highs as data on Monday showed Indian remained steady in April.
