Asian FX weaken as Fed tensions rise, yen stalls after suspected intervention – Most Asian currencies fell on Tuesday as expectations for a Federal Reserve meeting this week kept traders mostly tilted toward the dollar, while the yen edged lower after rebounding amid suspicions of government intervention.

Most regional currencies fell in April as traders steadily priced in expectations for an early interest rate cut from the Federal Reserve. A series of higher-than-expected U.S. inflation data boosted the idea.

The central bank is expected to keep interest rates steady but may send a hawkish signal following sticky inflation data as investors are…

Concerns about rising U.S. long-term interest rates have the dollar expected to rise 1.3% in April.

USD/JPY gains after falling from 160 as yen weakens

The pair, which measures the amount of yen needed to buy one dollar, rose 0.3% to about 156.80 on Tuesday.

The currency pair fell sharply from a 34-year high above 160 on Monday, sparking speculation that the Japanese government would intervene to boost the yen. Traders said the Japanese government's new bottom line appeared to be 160 USD/JPY.

Although the government made no formal remarks on the intervention, the yen rebounded after Japanese officials issued a series of verbal warnings over the past month.

Mixed data from Japan was one of the factors contributing to the yen's weakness on Tuesday. While March's increase exceeded expectations, it was significantly lower than expected, and the outlook for consumer spending and inflation is bleak.

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As of April, the yen was Asia's worst-performing currency, with the dollar rising nearly 4% against the yen.

Aussie dollar falls as weak retail sales weaken interest rate outlook

The Australian dollar was the worst-performing currency in Asian trading on Tuesday, falling 0.5% after data was significantly weaker than expected.

Data show that sticky inflation and high interest rates have severely affected consumer spending, leading to a weak inflation outlook. Traders have slashed expectations that the Reserve Bank of Australia will raise interest rates further this year.

The Aussie dollar is set to have a very lackluster performance in April.

PMI medium level, yuan weakens

The yuan rose 0.2% on Tuesday after mixed purchasing managers' index data pointed to a slowdown in China's economy.

Official data showed economic activity slowed slightly less than expected, but growth was significantly lower than expected.

While manufacturing activity painted a more optimistic picture, overall data still showed limited strength in Chinese business activity.

The dollar rose 0.3% against the yuan in April, with further gains limited by continued efforts by the People's Bank of China.

Other Asian currencies were weaker on Tuesday. The South Korean won gained 0.3% against the U.S. dollar and the Singapore dollar gained 0.1% against the U.S. dollar.

The Indian rupee edged closer to a record high hit earlier this month as caution over the 2024 general election offered little relief.

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