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By Ambar Warrick
Investing. com — Japan’s yen is among the worst-performing Asian currencies on Thursday after the country posted a record industrial deficit in August, while fears of more aggressive measures through the Federal Reserve weighed on top regional units.
The yen fell 0. 2% to 143. 43 per dollar, just above the 24-year low reached this month. Japan’s energy imports sent the country into a record industrial deficit of 2. 82 trillion yen ($1970 million) in August.
The yen is one of the worst-performing Asian currencies this year, basically affected by the widening gap between U. S. interest rates. The Bank of Japan has not signaled any target to raise rates this year, as the Japanese economy is still recovering from the effects of the COVID-19 pandemic.
Broader Asian currencies also fell, while the dollar remained at nearly 20-year highs after data showed U. S. industry value inflation reflected the strength previously seen in the consumer value index.
The dollar index and futures rose 0. 1%. With inflation in EE. UU. se stubbornly high in August, the Fed now has more momentum to keep raising rates dramatically.
Markets are now weighing the option of the Fed raising rates to a hundred core issues next week, with most investors expecting a 75 basis point increase.
The Chinese yuan weakened 0. 1% but traded near a two-year low last month. The People’s Bank of China (PBoC) on Thursday suspended financial easing measures because the hard-line outlook for U. S. interest rates was not in the process of being tightened. U. S. companies limited the bank’s room for manoeuvre.
The Chinese government is struggling to sustain economic expansion after a series of COVID lockdowns that crippled activity this year.
The yuan now faces the threat of falling below the 7 psychologically opposed to the dollar for the first time in more than two years.
Headwinds from a stronger dollar have hit Asian currencies to the maximum this year. South Korea’s won is trading at its lowest point in thirteen years.
In the Asia-Pacific region, the New Zealand dollar traded unchanged after it emerged that the country’s economy recovered more than expected in the current quarter, thanks to the easing of COVID restrictions.
The Australian dollar rose 0. 2% after knowledge showed continued strength in the country’s labour market, unemployment also rose slightly.
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