The yuan was an exception, remaining heady at its strongest level in 2-½ years after Beijing announced more stimulus measures in late-December

Most Asian currencies retreated on Monday as U.S. action against Venezuela kept markets on edge, while the yen weakened even as the Bank of Japan flagged more interest rate hikes.

The yuan was an exception, remaining heady at its strongest level in 2-½ years after Beijing announced more stimulus measures in late-December. Middling services activity data also did little to deter the yuan’s advance, following a series of strong midpoint fixes from the People’s Bank.

The dollar index and dollar index futures both rose about 0.3% each in Asian trade, with the greenback seeing increased haven demand in the face of heightened geopolitical uncertainty.

Trump also reiterated his calls for a U.S. takeover of Greenland.

The military action, coupled with Trump’s comments, ramped up uncertainty over global geopolitics. Analysts also warned that Washington’s actions could set a precedent for other global superpowers, specifically China and Russia.

The yen weakened further on Monday, with the USD/JPY pair rising 0.2% and remaining close to levels last seen in early-2025.

Weakness in the yen persisted even as BOJ Governor Kazuo Ueda said the central bank will continue raising interest rates as the economy and inflation move in line with its forecasts.

But Ueda’s comments largely reiterated his messaging from the BOJ’s December meeting, where the central bank raised rates by 25 basis points.

The yen remained squarely on the backfoot, with USDJPY also trading within ranges that have attracted government intervention in the past. But traders questioned just how much headroom Tokyo has to intervene further in currency markets, amid rising concerns over stretched fiscal spending in the country.

The yuan was an exception, with the USD/CNY pair extending recent losses and falling 0.2%. The pair was also at its lowest level since May 2023.

Strength in the yuan was sparked by Beijing outlining plans for more stimulus measures aimed at boosting consumer spending. The government announced a 62.5 billion yuan ($8.94 billion) program to extend its subsidies on consumer electronics and other goods in late-December.

China was also seen moving to shore up the yuan, with the PBOC setting a series of strong daily midpoints for the currency.

Private purchasing managers index data showed growth in China’s services sector slowed slightly in December, but remained in expansion for a third straight year.

Broader Asian currencies weakened. The Australian dollar’s AUD/USD pair fell nearly 0.2%, while the South Korean won’s USD/KRW pair rose 0.4%.