On Thursday, most of the Asian forex market traders saw the trading prices of most of the Asian currencies experience a retreat.
The reason behind the pull of the Asian currencies was the frenzy in the global forex market caused by the fears of a recession in the US.
There is a very high potential that the US economy may enter a recession in the year 2023. This has the entire forex market actively buying the dollar causing the trading prices of rival currencies to falter.
Japanese Action on Inflation Rates
While most of the Asian currencies recorded a dip, it was the Japanese yen that moved higher.
The reason why the Japanese yen is experiencing a surge is because of the recent statements made by the Bank of Japan.
The BOJ has predicted that it may keep on increasing the control range for yields. This means that the interest rates may keep on rising in Japan to control the rising inflation rates.
It is something exactly the same as the US did when it increased the interest rates in the country to control the inflation hike.
The BOJ has decided that it is going to show no flexibility toward the rising inflation rates and interest rate hikes. Until the situation is under control, the Bank of Japan will continue hiking the interest rates.
Due to the recent actions taken by the BOJ, the trading price of the Japanese yen has continued surging. The Japanese yen has performed really well against the trading price of the dollar in the latest session.
The report from the forex market shows that the trading price of the yen surged by 0.5% against the trading price of the dollar.
The report shows that in the recent trading session, the value of the yen has increased to 128.29 against the greenback. The recent surge made the yen the best-performing Asian currency of the day.
The Yen had Dipped 2.5% a Day Earlier
A day earlier, the trading price of the Japanese currency had recorded a major dip. It had reportedly plummeted by 2.5% in the Wednesday trading session.
The price of the currency surged because the BOJ made a decision that they would continue increasing the yield curve control.
The traders had expected that the BOJ would make a change and show flexibility toward the yield curve control. However, things did not work out the way expected for the traders and the BOJ made its own decision.
Performance of Other Major Currencies
Although the decisions made by the BOJ have boosted the trading value of the yen, other Asian currencies are facing a difficult situation.
The report shows that all major currencies from the Asian market are not doing well against the dollar.
The value of the Chinese yuan has reportedly experienced a downtrend against the dollar. Its value has dipped by 0.3% against the greenback, granting its dollar strength against it.
Despite the recent dip, economists are speculating that the Chinese economy will make a fast recovery. The value of the Chinese yuan will grow stronger against the major currencies.
The Philippine peso was also bad news for the traders as its value also recorded a major slip in the forex trading session.
The value of the peso sank 0.3% against the trading price of the dollar. The Australian dollar value has also experienced a dip against the dollar, as it ended up getting pulled by 0.5% against the greenback.
The New Zealand dollar value has also recorded a major plummet in the latest trading session as its value dipped significantly against the dollar.
As per the data, the trading value of the NZD dipped by 0.3% against the trading price of the dollar. For now, there is no telling where the Asian forex market would head.
However, if the Chinese economy makes a fast recovery, then the Asian forex market would pick up the pace.