Asian currencies mostly edge higher against the dollar as traders assess Middle East tensions and global AI growth. Markets grapple with uncertainty over the U.S.-Iran conflict, with MUFG Bank’s Michael Wan noting that the AI build-out remains a key upside driver. The U.S. dollar falls 0.1% to 1,474.60 yen and 0.1% to 1.2749 Singapore dollars, while the Australian dollar climbs 0.3% to US$0.7168.
Yen depreciation risks intensify as analysts warn the Bank of Japan (BOJ) may delay rate hikes. Nomura’s FX Research team highlights that USD/JPY nears 160, with fading June hike expectations risking further losses. Carry-trade funding demand could deepen pressure, with the dollar at 159.40 yen and the Australian dollar up 0.2% to 114.09 yen.
Euro gains 0.1% against yen at 186.86, reflecting divergent monetary policies. Investors weigh how prolonged BOJ inaction might reshape carry-trade strategies and regional economic stability.
Geopolitical tensions and market volatility underscore the fragility of currency markets. With AI optimism countering conflict-driven uncertainty, traders remain split on Asia’s near-term outlook.
Source: Wall Street Journal Markets · Summarized by HeadlinesBriefing