The yuan’s USD/CNY pair hovered near 6.91 yuan on Wednesday, remaining near its lowest level since May 2023

Most Asian currencies firmed on Wednesday, while the yuan moved little on softer-than-expected January inflation data.

The Australian dollar was a standout performer, surging to a three-year high following more hawkish signals from Reserve Bank of Australia officials.

The yen also firmed, extending recent gains after Prime Minister Sanae Takaichi’s landslide victory in Japan’s lower house. Japanese markets were shut for a holiday.

The yuan’s USD/CNY pair hovered near 6.91 yuan on Wednesday, remaining near its lowest level since May 2023.

The yuan showed little reaction to consumer price index inflation data reading weaker than expected for January. Producer price index inflation data also showed another month of decline, indicating that China’s disinflationary trend remained squarely in place.

The data was in part skewed by China’s Lunar New Year holiday taking place later this year. The break– which is usually characterized by heavy consumer spending– had landed in late-January in 2025, and had boosted inflation during that month.

The Lunar New Year holiday will be an extended, nine-day break in 2026, starting from February 15.

Still, Wednesday’s data underscored the need for more stimulus from Beijing, especially as producer prices dropped for a 40th consecutive reading.

The Australian dollar’s AUD/USD pair was a standout performer on Wednesday, soaring 0.7% to $0.7125– its strongest level in three years.

Asian currencies benefited from a softer dollar. The yen was among the key beneficiaries, with the USD/JPY pair dropping 0.5% to nearly 153.6 yen– hitting its lowest level in around two weeks. The yen had largely firmed past concerns over stretched Japanese fiscal spending following several warnings on potential intervention from Japanese government officials.

The Singapore dollar’s USD/SGD pair dropped 0.1%, while the won’s rose 0.3%.