BENGALURU (July 31): Most Asian currencies were little changed on Tuesday after the Bank of Japan refrained from making drastic changes to its accommodative policy and as investors waited on policy reviews from other major central banks, including the Federal Reserve.
Concluding its two-day policy board meeting, the BOJ took steps to make its massive stimulus programme more flexible, reflecting its forecast that it would take time for inflation to hit its 2% target. However, the central bank resisted making any big changes to its accommodative stance.
The immediate focus move to a press briefing by BOJ Governor Haruhiko Kuroda due at 0630 GMT.
The dollar index, a measure of its value against a basket of six major currencies, was flat at 94.318, off a one-year high of 95.656 touched on July 19.
"With the broad USD still directionless, and stuck within a defined range, the attention will be on the central bank meetings this week to potentially provide some new impetus," OCBC analysts said in a note.
The Fed concludes its policy meeting on Wednesday where it is expected to hold rates steady. The US central bank so far this year has increased borrowing costs in March and June, and investors see additional moves in September and December. Policymakers have raised rates seven times since December 2015.
The Bank of England is expected to raise interest rates when it meets on Thursday to a new post-financial crisis high of 0.75%. Investors will also watching out for a raft of manufacturing surveys globally, due out on Wednesday, for any signs a US-driven international trade war is having any impact on major export-reliant economies.
South Korea's won and the Thai baht inched up 0.2% each, the most among regional currencies in a reflection of the reluctance of traders to do much ahead of the central bank meetings.
Malaysia's ringgit, Indonesia's rupiah and the Philippines peso inched 0.1% lower.
China's yuan, which has been under pressure due to worries about the impact of a heated Sino-US trade row and slowing growth, weakened 0.1% after falling to a 13-month low on Monday. The yuan was headed for its fourth straight month of weakening, the longest such streak since early 2015.
Prior to Tuesday's market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.8165 per dollar, 34 pips weaker than the previous fix of 6.8131.
The Indian rupee, the wort performing Asian currency so far this year, ticked up 0.1%.
The Reserve Bank of India is expected to raise rates at its policy meeting on Wednesday, according to a Reuters poll
The Indonesian rupiah was on track to weaken for a fifth month in six as Southeast Asia's largest economy continues to grapple with a fragile currency amid escalating trade war concerns
In a cabinet meeting on Tuesday, Indonesia's President asked his ministers to make "serious" efforts to strengthen the country's foreign exchange reserves amid pressures caused by a global trade war.
Indonesia requires foreign inflow to finance its current account deficit and the central bank has spent around US$12 billion of its forex reserve in recent months to defend the rupiah, which has lost nearly 6% this year.
The following table shows rates for Asian currencies against the dollar at 0532GMT.
CURRENCIES VS US DOLLAR
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Change so far in 2018
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