Asian currencies were mixed on Wednesday, with the South Korean won surging after authorities signalled fresh steps to defend the currency, while the Japanese yen extended gains on hawkish central bank minutes, and the Australian dollar rose on firming rate-hike expectations.
The US Dollar Index stayed under pressure near an 11-week low as investors held on to bets for Federal Reserve rate cuts in 2026, despite evidence of strong U.S. economic growth.
Won surges on govt initiatives to support currency The South Korean won outperformed regional peers, jumping sharply after the finance ministry said foreign-exchange markets would soon see the government’s “strong determination” to stabilize the currency.
The won’s USD/KRW pair dropped 2% to 1,448.70 won as of 06:24 GMT, the lowest in a month.
Authorities also unveiled a package of tax measures aimed at reducing volatility, including steps to encourage domestic investment flows.
Adding to the won’s support, media reports showed that the National Pension Service had begun “strategic” currency hedging, a move widely seen as helping to curb dollar demand and smooth sharp market swings after weeks of sustained weakness in the won.
Japanese yen gains on hawkish BOJ minutes In Japan, the yen’s USD/JPY pair fell 0.4% after minutes from the Bank of Japan’s latest policy meeting showed policymakers actively debated the need for additional interest rate hikes.
The discussion reinforced market expectations that the BOJ could continue its gradual policy normalization, lending support to the yen even as officials reiterated their readiness to respond to excessive currency moves.
The Australian dollar’s AUD/USD edged up 0.2% to over a one-year high as traders increased bets that the Reserve Bank of Australia could raise interest rates later next year.
Recent RBA commentary and resilient domestic data have pushed money markets to price in a higher probability of tightening, while the softer tone in the U.S. dollar provided additional support to the currency.
Dollar at 11-week low despite strong econ growth data Elsewhere, the U.S. dollar hovered near its weakest level in about 11 weeks. Markets remained focused on the outlook for easier U.S. monetary policy in 2026, with rate-cut expectations largely intact despite data showing the U.S. economy expanded at a strong 4.3% annualised pace in the third quarter.
Investors have instead emphasised signs that inflation pressures may continue to ease, keeping the Fed on track to lower borrowing costs over the medium term.
Other Asian currencies traded in narrow ranges as holiday-thinned liquidity limited activity across regional markets.
In China, the yuan’s onshore pair USD/CNY was little changed, while the offshore pair USD/CNH ticked 0.1% lower.
The Indian rupee’s USD/INR gained 0.2%, while the Singapore dollar’s USD/SGD ticked down 0.2%.
