High US Yields Weigh On Regional FX

Asian currencies remain under significant pressure as elevated US Treasury yields and hawkish Federal Reserve expectations drive a global bid for the US Dollar. Despite domestic policy support in markets like India and Indonesia, regional FX sentiment is dampened by slowing Japanese inflation and high oil prices.

Key Takeaways

• 1.Elevated US yields and hawkish Fed repricing are the primary drivers of weakness in Asian currencies, with the US 10-year yield rising to approximately 4.57%.
• 2.Japan's core inflation slowed to 1.4% yoy in April, missing consensus and suggesting a slower path for the BOJ to normalize rates, keeping the Yen under pressure.
• 3.Regional central banks like the RBI and Bank Indonesia are actively supporting their currencies through rate hikes or interventions despite persistent external headwinds.

Table of Contents

• Market Highlights
• Ahead Today
• INDICATIVE RATES
• Disclaimer
• CERTIFICATION
• DISCLAIMERS
• Legal entities and branches
• General disclosures
• Country and region specific disclosures

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