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Free Malaysia Today
28-05-2025
- Business
- Free Malaysia Today
Yen shrugs off tepid bond demand, dollar firms on trade deal hopes
The yen has gained nearly 9% so far in 2025 due to dollar weakness and safe-haven flows. (AP pic) SINGAPORE : The Japanese yen was steady today as ructions in the bond market kept the spotlight on the fiscal health of major economies, while the US dollar was firm due to upbeat economic data and signs of easing trade tensions. The yen cut its losses to trade flat at 144.445 per dollar after dropping 1% yesterday in the wake of reports that Japan will consider trimming issuance of super-long bonds after a sharp rise in yields in recent weeks. The focus remained on the Japanese bond market, with demand at an auction of Japan's longest-tenor bonds today falling to the lowest since July. The 40-year JGB yield spiked to a record high last week as worries about the debt load in Japan and other developed markets like the US led to a selloff in the longest-dated bonds across the globe. Today, yields on Japanese government bonds were elevated, as were US Treasury yields, but the reaction in the market was fairly muted. 'The (Japan) bond auction today is somewhat a little bit weaker than expected … what this goes to show is that there's a lot of focus on the trajectory of debt and deficits globally,' said Michael Wan, senior currency analyst at MUFG. The yen has gained nearly 9% so far in 2025 due to dollar weakness and safe-haven flows as investors flee US assets in the wake of the erratic trade policies under President Donald Trump that have roiled markets. Frances Cheung, head of FX and rates strategy at OCBC, said the market reaction to the soft auction result had been muted so far, 'probably as the bond sales had already been expected to suffer a bit after the latest richening in the bond'. Fiscal outlook Fiscal worries are front of mind for investors after Moody's downgrade of the US credit rating on a rising debt burden this month and soft demand for a US Treasury Department bond auction last week that lifted 30-year Treasury yields above 5%. The euro was 0.2% weaker at US$1.1306 after dropping 0.5% in the previous session as a bout of dollar buying hit the markets amid signs of possible trade deals and data showing US consumer confidence in May was much better than expected. Still, new orders for key US-manufactured capital goods plunged by the most in six months in April as the flip-flopping tariff salvos take a toll on the economy and businesses. The US dollar was also boosted by Trump's decision to delay higher tariffs on the EU over the weekend. EU officials have asked the bloc's leading companies and CEOs for details of their US investment plans, two sources familiar with the matter told Reuters, as Brussels prepares to advance trade talks with Washington. Sterling last bought US$1.34885 but stayed close to the three-year high touched on Monday. Worries about Britain's stretched finances have also weighed on investor appetite for the country's debt. The dollar index, which measures the US currency against six rivals, was last 0.25% higher at 99.776 but is down 8% for the year as investors look for alternatives to US assets. Investors will watch out for the April personal consumption expenditure report – the Federal Reserve's preferred inflation gauge – on Friday that could help gauge the impact of Trump's trade policies. The Australian dollar last fetched US$0.6436 as data showed consumer inflation held steady in April, leaving hopes for more interest rate cuts mostly intact. Last week, the Reserve Bank of Australia lowered interest rates by 25 basis points. The New Zealand dollar firmed 0.29% to US$0.5966 after the country's central bank signalled it might be nearer to an end to easing than some in the market had hoped for as it cut rates by 25 bps as expected.
Business Times
13-05-2025
- Business
- Business Times
Greenback's relief rally from US-China tariff truce is but a brief blip: analysts
[SINGAPORE] Traders rewarded the US dollar with gains against major Asian currencies after trade tensions between Beijing and Washington thawed – but the greenback could soon be singing the blues again as analysts expect the relief rally to be short-lived. The US dollar index – which measures the greenback's value against a basket of six major currencies: the euro, yen, pound, Canadian dollar, krona, and franc – jumped more than 1 per cent across Monday (May 12) afternoon before stabilising at around 101.6 as at early evening on Tuesday. The US shaved its earlier tariff of 145 per cent on Chinese goods to 30 per cent on Monday after a temporary deal for 90 days was brokered during weekend trade talks in Geneva. Further negotiations are expected to follow. The larger-than-expected tariff cuts reignited risk-on sentiment across global markets, which reacted swiftly and with much relief. US stocks and treasury yields climbed, and the greenback and renminbi strengthened; meanwhile, investors scaled back their long positions in safe-haven proxies, such as the yen and gold, as they rotated into risk assets. The world's reserve currency reaped returns against its South-east Asian peers, tracking gains on the baht, ringgit, rupiah, Singdollar and Philippine peso. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up The renminbi was among few currencies that rose against the greenback, charting roughly a 0.8 per cent gain before stabilising to about 7.2 yuan per US dollar as at early evening on Tuesday. Against the backdrop of weakening US dollar dominance, China's renminbi is shaping up to be a barometer for the region's currency swings. Noting that 'the really fascinating market moves came in the FX markets', MUFG Bank's senior currency analyst Michael Wan pointed out in a Tuesday report that these currency flows are not historically what one would expect in a risk-on environment. When investors are more optimistic with a stronger appetite for risk, they would typically shift from safer assets to higher-yielding and riskier ones – which is a disconnect from prevailing market conditions. Wan explained that these currency moves are, to an extent, a short-term reversal of earlier US dollar weakness following Apr 2's announcement of reciprocal tariffs on what Trump has termed 'Liberation Day'. The disparity can also be attributed to partial retracing of earlier outperformance in the euro and yen, as well as previous underperformance in the renminbi. Meanwhile, USD/Asia currency pairs were impacted by their beta, or sensitivity, to the stronger dollar. Fragile rally Foreign exchange (FX) pundits across the board caution that the current bout of strength is built on shaky ground. Maybank analysts said in a Tuesday report that the further unwinding of short-US-dollar positions they observed from the tariff truce 'is probably close to an end'. DBS senior foreign exchange strategist Philip Wee cautioned in a Tuesday report against confusing the trade relief with a catalyst for the US dollar's comeback. 'Trump's policies have been marked by unpredictability and volatility, wielding tariffs to get concessions and pursuing significant tax cuts and industrial subsidies without a meaningful fiscal offset,' he said. He also highlighted US treasury secretary Scott Bessent's warning that his department could exhaust its borrowing capacity as early as in August. MUFG Bank's Wan echoed his sentiments. The way he sees it, the million-dollar question on what will happen to Asian currencies against the dollar moving forward depends not just on trade deals, but also on three driving factors. They are: continued questions over US exceptionalism; capital inflows into American equities that buoy the US dollar and hence its strength against Asian currencies; or the net impact of tariffs on global and regional Asia growth. 'While our eyes are all transfixed on the US-China trade deal at the moment, we should also not forget the upcoming US tax bill, which is in discussion now and might shift the market's focus onto US fiscal sustainability, hence also impacting US dollar/Asia more broadly,' Wan cautioned. Investors will also be closely watching the slew of US data releases to come this week – though HSBC analysts are not as concerned. US consumer prices for April are due to come in on Tuesday; retail sales, producer prices and industrial production figures will be released on Thursday; housing starts for April, and building permit numbers will be announced Friday. 'Even if some of the hard data surprises negatively in the coming weeks, markets may well shrug that off as being driven by the 'pre-China-tariff' world and, thus, no longer relevant,' said the house's strategists in a Monday report. 'Continued resilience in the hard data or even upside surprises on the other hand would likely be taken as a positive – a classic win-win situation,' they added.
Yahoo
10-05-2025
- Business
- Yahoo
Rupee logs sharp weekly fall as India-Pakistan conflict intensifies
By Jaspreet Kalra MUMBAI (Reuters) - The Indian rupee declined this week as the conflict between India and Pakistan intensified, hurting local equities and sovereign bonds, while likely intervention by the central bank on Friday helped shield the South Asian currency. The rupee closed stronger on the day at 85.37 against the U.S. dollar. It had weakened to a near one-month low of 85.8425 in early trading before the Reserve Bank of India stepped in to support the rupee, per traders. The currency declined 0.9% on the week. The conflict between India and Pakistan has widened, with both countries accusing each other of launching new military attacks on Friday, using drones and artillery for the third day in the worst fighting seen in nearly three decades. "Our sense right now is that there is a fundamental incentive both on India and Pakistan to avoid substantial escalation over the medium-term," Michael Wan, senior currency analyst at MUFG, said in a note dated May 9. "With geopolitical conflicts, it is also important to be humble and say that there is much we do not know," the note added. The mood among Indian foreign exchange traders shifted from poise to frenzy over the last two sessions as the rupee confronted a sharp decline, with rising hedging costs and options metrics reflecting the market's nervousness. The 1-month dollar-rupee non-deliverable forwards climbed to their highest in a month on Friday, underscoring offshore market participants' concerns about rupee weakness. India's benchmark equity index, the Nifty 50 fell over 1% on the day while government bonds were little changed after dipping in early trading. [.BO] [IN/] "Heavy intervention" by the RBI helped the rupee avoid deeper losses, a trader at a large foreign bank said. The absence of a central bank intervention could have spared a speculative build-up against the currency, the trader added. Other Asian currencies were mostly weaker on the day while the dollar index slipped 0.2% to 100.3. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Economic Times
09-05-2025
- Business
- Economic Times
Rupee logs sharp weekly fall as India-Pakistan conflict intensifies
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel The Indian rupee declined this week as the conflict between India and Pakistan intensified, hurting local equities and sovereign bonds, while likely intervention by the central bank on Friday helped shield the South Asian currency The rupee closed stronger on the day at 85.37 against the U.S. dollar. It had weakened to a near one-month low of 85.8425 in early trading before the Reserve Bank of India stepped in to support the rupee, per traders. The currency declined 0.9% on the conflict between India and Pakistan has widened, with both countries accusing each other of launching new military attacks on Friday, using drones and artillery for the third day in the worst fighting seen in nearly three decades."Our sense right now is that there is a fundamental incentive both on India and Pakistan to avoid substantial escalation over the medium-term," Michael Wan, senior currency analyst at MUFG, said in a note dated May 9."With geopolitical conflicts, it is also important to be humble and say that there is much we do not know," the note mood among Indian foreign exchange traders shifted from poise to frenzy over the last two sessions as the rupee confronted a sharp decline, with rising hedging costs and options metrics reflecting the market's 1-month dollar-rupee non-deliverable forwards climbed to their highest in a month on Friday, underscoring offshore market participants' concerns about rupee benchmark equity index , the Nifty 50 fell over 1% on the day while government bonds were little changed after dipping in early trading."Heavy intervention" by the RBI helped the rupee avoid deeper losses, a trader at a large foreign bank absence of a central bank intervention could have spared a speculative build-up against the currency, the trader Asian currencies were mostly weaker on the day while the dollar index slipped 0.2% to 100.3.
Time of India
09-05-2025
- Business
- Time of India
Rupee logs sharp weekly fall as India-Pakistan conflict intensifies
The Indian rupee declined this week as the conflict between India and Pakistan intensified, hurting local equities and sovereign bonds, while likely intervention by the central bank on Friday helped shield the South Asian currency . The rupee closed stronger on the day at 85.37 against the U.S. dollar. It had weakened to a near one-month low of 85.8425 in early trading before the Reserve Bank of India stepped in to support the rupee, per traders. The currency declined 0.9% on the week. The conflict between India and Pakistan has widened, with both countries accusing each other of launching new military attacks on Friday, using drones and artillery for the third day in the worst fighting seen in nearly three decades. "Our sense right now is that there is a fundamental incentive both on India and Pakistan to avoid substantial escalation over the medium-term," Michael Wan, senior currency analyst at MUFG, said in a note dated May 9. "With geopolitical conflicts, it is also important to be humble and say that there is much we do not know," the note added. Live Events The mood among Indian foreign exchange traders shifted from poise to frenzy over the last two sessions as the rupee confronted a sharp decline, with rising hedging costs and options metrics reflecting the market's nervousness. The 1-month dollar-rupee non-deliverable forwards climbed to their highest in a month on Friday, underscoring offshore market participants' concerns about rupee weakness. India's benchmark equity index , the Nifty 50 fell over 1% on the day while government bonds were little changed after dipping in early trading. "Heavy intervention" by the RBI helped the rupee avoid deeper losses, a trader at a large foreign bank said. The absence of a central bank intervention could have spared a speculative build-up against the currency, the trader added. Other Asian currencies were mostly weaker on the day while the dollar index slipped 0.2% to 100.3. ETMarkets WhatsApp channel )
