Asian forex firms, yen at 8-month high as dollar retreats after presidential debate By Investing.com

Investing.com– Most Asian currencies gained ground on Wednesday as the dollar retreated after a heated U.S. presidential debate, focusing on key future inflation data due later in the day.

The Japanese yen was among the biggest beneficiaries of the trade, with increased safe-haven demand after the debate sent the yen to its strongest level since early January. The yen also benefited from somewhat dovish comments from Bank of Japan officials.

Broader Asian currencies advanced on Wednesday, seeing some relief from a weaker dollar. But regional markets continued to suffer steep losses in the past week amid declining risk appetite.

Dollar Falls After Presidential Debate; Expected CPI

And both were down about 0.2 percent in Asian trade, with losses in the greenback following a heated presidential debate between Kamala Harris and Donald Trump.

The debate has raised expectations for a heated presidential race in 2024, which could present a major point of uncertainty for markets given the contrasting views on policy promoted by both candidates. Harris and Trump have strayed from the topics at hand to engage in personal attacks on each other.

The dollar was also on the back foot ahead of key inflation data due later in the day, which are expected to provide more clues on interest rates.

The reading comes just a week before , where investors expect the central bank to cut rates by at least 25 basis points.

Japanese yen at 8-month high on safe-haven demand, BOJ hawkspeak

The yen was the best performer in Asia, with the pair down 0.8 percent at 141.38 yen – its lowest level since early January.

The currency benefited from some safe-haven plays as uncertainty over the US election rose after Tuesday’s debate.

But a main point of support for the yen came from bullish comments by BOJ member Junko Nakagawa, who said the central bank would continue to raise interest rates if inflation moves in line with its forecasts.

Nakagawa’s comments follow a series of signals of sorts from the BOJ and were also made just a week before a BOJ meeting. Investors are uncertain about another interest rate hike by the central bank, after a 15 basis point increase at the end of July.

Broader Asian currencies advanced, albeit slightly, as attention turned to the upcoming US CPI reading.

The Chinese yuan pair fell 0.1 percent, but the yuan remained on the back foot as U.S. policymakers proposed several more trade restrictions against Beijing.

The South Korean won pair was down 0.3 percent, while the Singapore dollar pair was down 0.2 percent.

The Indian rupee steadied near 84 rupees, while the Australian dollar pair was steady after falling from more than nine-month highs in the past week.