The US dollar was steady in Tuesday’s Asian session but stuck near the 8-month lows it set yesterday against a basket of currencies. After hitting a fresh 17-month low versus the yen on Monday, the dollar clawed back above 108 yen during Asian trading today and was last at 108.32 yen.
The euro and the pound also rebounded from their respective lows versus the yen as Japanese government officials upped their verbal warnings against further yen gains. On Tuesday, Japan’s Finance Minister Taro Aso repeated that the government “would take necessary steps under certain circumstances if one-sided and speculative moves were observed”, adding that such a move would be in line with the G20 agreement.
The slightly weaker yen lifted Japanese stocks to end the day 1.1% higher, while in Sydney, Australian shares closed up 0.8%, following strong business survey data and rising commodity prices.
The National Australia Bank's business conditions index rose to the highest since 2008 in March, and the business confidence index reached the highest since September 2015.
The positive data helped the Australian dollar climb back above 0.76 versus the greenback in early Asian trading, and it last stood at 0.7635. The Aussie was also boosted by a 5% jump in iron ore prices on Monday.
In other commodities, crude oil closed up sharply higher for a second day on Monday, helped by renewed optimism that a meeting in Doha on Sunday between major producers will result in an agreement to freeze output at current levels. Signs of rising demand and falling US production have also supported prices in recent days.
Brent crude rose to a 4-month high of $43.06 a barrel, while WTI crude reached a 3-week high of $40.75 a barrel.
Gold also made strong gains on Monday and continued to advance in today’s Asian session to climb to $1258.55 an ounce.
In European currencies, the euro held above 1.14 dollars and was supported by final German CPI figures that confirmed consumer prices rose by 0.3% annually in March.
The pound meanwhile was buoyant as it benefited from short covering ahead of UK inflation data later today. Sterling jumped by 1% against the dollar yesterday and extended its climb to 1.4273 dollars in Asian trading today.
Coming up later today, UK March inflation figures will be the main data in European trading. The latest API crude stock data out of the US will also be watched later in the US session. But the main attention will likely be on speeches by the Fed’s Harker, Williams and Lacker, who are all due to speak later today.