Broader Asian currencies were mixed, but saw some strength over the past week

Most Asian currencies kept to a tight range on Wednesday. The yuan weakened slightly after inflation figures for August showed disinflation remained squarely in play, heralding continued weakness in Asia’s largest economy.

Broader Asian currencies were mixed, but saw some strength over the past week.

The yuan’s USD/CNY pair gained 0.1% on Wednesday, losing some ground after a series of strong fixings pushed the currency to a near 10-month high.

Chinese Consumer Price index (CPI) inflation dipped by a bigger-than-expected 0.4% in August, indicating that private spending and local demand was faltering as support from Beijing’s subsidies ran dry.

Producer Price Index (PPI) inflation dropped 2.8%, and marked a 35th straight month of decline.

Wednesday’s data showed a disinflationary trend in China remained squarely in play, as heightened economic uncertainty weighed on the economy.

The figures also underscored the need for more stimulus measures from Beijing to support growth.

The yuan was still sitting on stellar gains over the past month on support from Beijing, with analysts viewing the move as being aimed at encouraging more exports to the country.

But any more stimulative measures from Beijing, including monetary support, are likely to undermine the yuan.

Broader Asian currencies kept to a tight range on Wednesday. The yen’s USD/JPY pair hovered near 147.45 yen, steadying after whipsawing on the abrupt resignation of Japanese Prime Minister Shigeru Ishiba earlier this week.

The Australian dollar’s AUD/USD pair added 0.2%, taking support from stronger commodity prices.

Oil prices rose amid heightened geopolitical tensions in the Middle East. In metals, copper prices gained on the closure of a key mine in Indonesia, which could weigh on global supplies.

The Singapore dollar’s USD/SGD pair was flat, while the Indian rupee’s USD/INR pair dropped 0.1% from near record highs.

The won’s USD/KRW pair dropped 0.1%.