Broader Asian currencies mostly advanced in recovery from late-Wednesday losses

Most Asian currencies edged higher on Thursday, recovering a measure of sharp overnight losses.

The yen steadied, remaining close to its weakest level since mid-2024 after the Bank of Japan left interest rates unchanged as expected.

Broader Asian currencies mostly advanced in recovery from late-Wednesday losses. A spike in oil prices, amid a rapidly escalating U.S., Israel and Iran war kept most markets on edge.

The yen’s USD/JPY pair dropped 0.1% after rising sharply overnight, with the pair remaining close to its highest levels since mid-2024.

The BOJ left its overnight call rate at 0.75% as widely expected, with only one member of the central bank’s nine-member board calling for a 25 basis point hike.

The BOJ flagged some caution over rising oil prices due to the Iran war, although it forecast that Japanese inflation will largely cool in the near-term. But the central bank expects inflation to pick up steadily later in 2026 – a trend that could elicit more interest rate hikes in the coming months.

Beyond the BOJ, several other central banks such as the Bank of England, the European Central Bank and the Swiss National Bank are also set to hold meetings later in the day.

Among Asian currencies, the yuan’s USD/CNY pair gained 0.3% on Thursday, while the Singapore dollar’s USD/SGD pair declined 0.2%.

The Australian dollar was an outperformer, with the AUD/USD pair adding nearly 0.4% after employment data for February read much stronger than expected, although unemployment also rose unexpectedly.

The won’s USD/KRW pair shed 0.7%, while the Indian rupee’s USD/INR pair steadied around 92.9 rupees after hitting a record high over 93 rupees overnight.