Asia FX sees some relief as dollar retreats, yen at 34-year lows

The greenback retreated further from recent five-month peaks this week on some soft purchasing managers index data. But persistent bets on higher-for-longer U.S. interest rates and anticipation of more key economic readings kept traders largely biased towards the dollar. 

Yen weak as USDJPY heads towards 155 

But the Japanese yen saw little relief from a softer dollar, with the pair trading near 34-year highs and in sight of the 155 level. 

The yen weakened even as a slew of Japanese officials warned of government intervention to support the beleaguered currency. Traders saw USDJPY at 155 as potentially attracting intervention by the government.

Weakness in the yen came ahead of a this Friday, where the central bank is expected to keep rates unchanged after a historic hike in March. But its outlook on inflation and economic growth will be closely watched. 

Australian dollar rallies on hotter-than-expected inflation 

The Australian dollar’s pair was among the best performers in Asia on Wednesday, up 0.5% at a nearly two-week high.

The currency shot up after inflation read stronger than expected for the first quarter, pushing further above the Reserve Bank of Australia’s 2% to 3% annual target. 

The reading gives the RBA more impetus to keep interest rates higher for longer, which bodes well for the Australian dollar.