(Bloomberg) — Most Asian currencies strengthened due to weakness in the dollar as investors awaited fresh trade news that may define the appetite for US assets.
The Bloomberg Asia Dollar Index climbed toward the highest level since October as concern about the US outlook weighed on demand for the greenback. The yen rose as much as 0.5% after Bank of Japan Governor Kazuo Ueda indicated his intention to keep raising interest rates if the economy improves. The Taiwan dollar advanced for a sixth day. Asian shares swung between gains and losses.
Treasuries edged higher with the 10-year yield falling two basis points. Japan’s 40-year bonds rose ahead of a bond auction. Futures contracts for the S&P 500 and Nasdaq 100 jumped over 1%, holding their gains from a Monday holiday.
Bloomberg’s gauge of the dollar slipped for a third day, heading for its lowest close since July 2023 on weak demand for US assets. President Donald Trump’s tariff threats and the risk of a widening US fiscal deficit are showing up most clearly in the dollar, diminishing the appeal of the currency.
The People’s Bank of China set its daily reference rate for the yuan basically in line with the average forecast in a Bloomberg survey and with the spot rate, a sign Beijing is moderating its support for the currency amid dollar declines.
“Any further tariff news could inject more volatility into currency markets and pull the dollar down,” Kristina Clifton, a senior economist and currency strategist at Commonwealth Bank of Australia, wrote in a note.
The dollar gauge has fallen more than 7% this year and is set to wipe out all of its gains from 2024, when the index rose the most since 2015. Investor demand for dollars is fading amid jitters over tariffs and concern over the US government’s finances spurred by plans to extend tax cuts implemented by Trump in his first term.
“In a way, all roads have led to a weaker dollar,” Chris Weston, head of research at Pepperstone Group, wrote in a note. “Higher perceived US deficits have raised concerns about increased future Treasury issuance, pushing up term premium and seeing people migrate away from the dollar.”
Tariff headlines are once again dominating the market after the European Union agreed to accelerate trade negotiations with the US, sending stocks higher Monday.
In Japan, yields on super-long bonds fell ahead of an auction Wednesday that is expected to test demand following a recent sale that sent jitters through global markets. Yields on 40-year and 30-year maturities slid 10 basis points in Tokyo, adding to declines in recent days. These moves followed sharp gains in yields to record highs last week.
China’s central bank asked its major lenders to raise the share of yuan when facilitating cross-border trade, in its latest push for the use of the currency as the world grapples with the onslaught of tariffs by the US.
Trump’s plan to bring more factories back to the US has President Xi Jinping’s government also considering options to boost production of high-end technological goods.
A key event this week will be Nvidia Corp.’s results on Wednesday. The chip-making giant is seen as a bellwether for so called growth stocks and the sustainability of the artificial intelligence boom. Its outlook will be crucial given macro risks and tariff uncertainty.
Investors are also gearing up for the Federal Reserve’s preferred inflation measure, the US personal consumption expenditures price index excluding food and energy, which will be released Friday. The April reading is forecast to rise 0.1% based on consensus expectations.
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.9% as of 11:16 a.m. Tokyo time
- Nikkei 225 futures (OSE) fell 0.4%
- Japan’s Topix was little changed
- Australia’s S&P/ASX 200 was little changed
- Hong Kong’s Hang Seng rose 0.3%
- The Shanghai Composite was little changed
- Euro Stoxx 50 futures fell 0.2%
Currencies
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro rose 0.1% to $1.1401
- The Japanese yen rose 0.4% to 142.24 per dollar
- The offshore yuan was little changed at 7.1807 per dollar
Cryptocurrencies
- Bitcoin fell 1% to $108,485.65
- Ether fell 1.1% to $2,539.15
Bonds
- The yield on 10-year Treasuries declined three basis points to 4.49%
- Australia’s 10-year yield declined six basis points to 4.33%
Commodities
- West Texas Intermediate crude fell 0.4% to $61.30 a barrel
- Spot gold fell 0.1% to $3,340.13 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Matthew Burgess and Jason Scott.
©2025 Bloomberg L.P.
