Investing.com – Most Asian currencies were little changed on Tuesday, while the dollar steadied as markets await key U.S. inflation data for more signals on when the Federal Reserve might start cutting interest rates.
The index was the worst performer among its regional peers, retreating sharply from more than a month’s high after comments from senior Bank of Japan officials cooled bets on an immediate rate hike by the central bank.
Yen falls as BOJ’s Ueda trims economic optimism
The yen weakened about 0.3% against the dollar, retreating from more than a month’s high on Monday.
The currency’s reversal came largely after Bank of Japan Governor Kazuo Ueda said that while the Japanese economy was recovering, it was also showing signs of weakness, especially in consumption. He sounded a slightly less optimistic tone about the economy than markets had expected.
Ueda’s comments come just days before the central bank is expected to signal or even take action to end yield curve control and the negative interest rate regime.
The higher-than-expected forecast and an upward revision in the fourth quarter have fueled the idea in recent sessions, with economic strength giving the Bank of Japan more room to tighten policy.
Asian currencies generally moved in a flat to tame range. The index stabilized near a two-month high while hovering around a six-month high.
The fall was about 0.1%, with little movement.
The rate rose 0.1% following a stronger-than-expected forecast from the People’s Bank, although the currency’s outlook remained gloomy amid a subdued economic recovery.
Dollar stabilizes after recent losses amid consumer price index (CPI) data
The index fell slightly in Asian trading on Tuesday but stabilized after sharp losses last week.
Focus has now turned to upcoming US data, which will likely factor into the Federal Reserve’s 2024 interest rate plans.
Consumer price index data is expected to show inflation will remain stable and well above the Fed’s annual 2% target through February, a trend that is likely to prompt a hawkish outlook from the central bank.
Tuesday’s consumer price index reading will also be in focus after several Fed officials, most notably Chairman Jerome Powell, warned that the central bank’s stance on cutting interest rates will be largely determined by inflation dynamics.
However, according to .