Asian Currencies Stall as Fed Outlook and Trade Truce Weigh; Yen Strengthens on BOJ Hike Bets

Asian FX markets were largely subdued on Wednesday after softer U.S. inflation data and Monday's U.S.-China tariff truce tempered rate-cut expectations. The Japanese yen bucked the regional pattern—rallying on renewed bets that the Bank of Japan will follow through with policy tightening.

Fed Rate Path in Focus After Soft CPI, Trade Deal

Data released Tuesday showed U.S. April CPI rose 2.3% year-over-year (vs. 2.4% expected) and 0.2% month-over-month (vs. 0.3% expected). This cooler print, combined with the agreement to cut U.S. tariffs on China to 30% (from 145%) and China's to 10% (from 125%) for 90 days, has given the Fed more leeway—though officials have signaled they'll wait for clear signs of economic weakening before cutting rates.

“De-escalation of trade tensions is helpful for growth, but it makes it more likely inflation will remain contained, limiting the scope for Fed rate cuts,” said ING analysts.

JPY Strengthens on BOJ Hike Speculation

• USD/JPY: -0.5%

• Drivers: Japan's April wholesale inflation climbed 4.0%, reinforcing expectations that the BOJ will raise rates further to tame domestic price pressures.

This divergence highlights the contrast between a Fed on hold and a BOJ edging toward tightening.

Other Asian Currencies Muted

• USD/CNH (offshore yuan): +0.2%

• USD/CNY (onshore yuan): Flat

• USD/KRW (won): Flat

• USD/SGD (Singapore dollar): Flat

• AUD/USD (Australian dollar): +0.1%

• USD/INR (Indian rupee): Muted after recent declines on India-Pakistan tensions

To track these pair movements in real time, leverage the Forex Daily API, which provides up-to-the-minute FX rates and historical trends:
View Live Asian Currency Rates

What to Watch Next

1. U.S. Fed Speeches & Minutes: Any shift toward a rate-cut timeline could reignite dollar strength.

2. BOJ Policy Meeting: Confirmation of another hike would further underpin the yen.

3. Further Trade Negotiations: Clarity on duration or deepening of the tariff pause could sway broader risk sentiment and regional FX flows.

By combining real-time FX data from the Forex Daily API with upcoming central-bank events, investors can stay ahead of the next major currency moves in this delicate macro backdrop.