The USD/JPY pair dropped 0.7% to 153.34, after the yen firmed as much as 152.89, its strongest level since February

Asian currencies were mostly firmer on Tuesday as the yen climbed to a seven-month high.

The USD/JPY pair dropped 0.7% to 153.34, after the yen firmed as much as 152.89, its strongest level since February and beyond the levels reached during Japan’s July intervention.

The currency has now risen around 4.5% from nearly 160 per dollar early last week.

Japan’s economy grew at an annualized 1.4% in the April-June quarter, revised up from 1.1%. The stronger-than-expected growth adds to the case for further BOJ tightening.

Markets now price around a 75% chance of a 25-basis-point BOJ hike on September 18, with a 60% probability of another increase by December.

Japanese Finance Minister Satsuki Katayama said Tuesday that Tokyo’s approach to currencies had not changed since its intervention.

The intervention backdrop remains significant. Japan’s foreign securities holdings dropped a record $87.8 billion in August, close to the scale of its latest currency intervention, while the Finance Ministry has said intervention contributed to the decline in reserves.

The USD/KRW pair dropped 0.3% to 1,340.80, leaving the won close to its strongest level since October 2024. The currency has been supported by foreign inflows into Korean equities and a rally in semiconductor stocks.

South Korea’s economy grew 0.6% quarter-on-quarter and 3.7% year-on-year in the second quarter, beating forecasts, with semiconductor exports helping offset weaker construction investment.

Foreign investors have continued buying Korean shares, supporting demand for the won, although the pace of its recent gains could prove difficult to sustain.

Yuan remained firm near a 3½-year high, with the USD/CNH pair at 6.71 and the USD/CNY pair flat at 6.71.

China’s exports jumped 25% year-on-year in August, while imports gained 28.2%, as strong demand for high-tech and artificial-intelligence products supported trade despite weak domestic demand.

The Australian dollar weakened slightly, with the USD/AUD pair adding 0.1% to 1.3862, as a sharp fall in consumer sentiment revived concerns over household finances. The USD/NZD pair gained 0.42% to about 1.707, implying a weaker New Zealand dollar at $0.5859.