China’s spree of stimulus measures this week continued to boost risk appetite, lifting stocks, commodities and risk-sensitive currencies
The dollar wavered on Friday and looked set for a third successive month of declines as investors weighed U.S. data to gauge the pace of interest rate cuts, while China’s spree of stimulus measures kept risk-sensitive currencies aloft.
The yen dropped to 145.57 in early trading, its lowest since September 3, as Japan’s ruling party holds one of the most unpredictable leadership contests in decades on Friday.
Markets braced for the victory of hardline nationalist Sanae Takaichi, a vocal opponent of further interest rate hikes in Japan among the three frontrunners.
Results from the first round of voting are expected during market hours in the Asian afternoon, and a runoff election will likely follow.
Data on Friday showed core inflation in Japan’s capital matched the central bank’s 2% target in September, a sign the economy is making progress in meeting the criteria for further rate hikes.
Meanwhile, China’s spree of stimulus measures this week continued to boost risk appetite, lifting stocks, commodities and risk-sensitive currencies. Steps so far have included reducing the amount of cash banks must hold as reserves by 50 bps to free up more funds for lending and a slew of cuts in key interest rates.
Sterling was a tad lower at $1.33935 but stayed close to the 2-1/2 year high it hit this week, while the Australian and New Zealand dollars also held near multi-year peaks due to China stimulus plans.
The Aussie slipped to $0.6880, but was close to the 18-month high it hit on Wednesday. The kiwi last fetched $0.63065, not far from its nine-month high.
