Japan issued its strongest warning in weeks on Wednesday against a rapid decline in the yen, with its top currency official saying the country was prepared to take action in the face of speculative market moves.
“If these moves continue, the government will deal with them appropriately without ruling out any options,” Masato Kanda, vice finance minister for international affairs, said on Wednesday.
Shortly afterward, China’s central bank offered its tightest guidance yet on the yuan’s daily discount rate, while the managed currency weakened to levels not seen since 2007.
The latest data on the US economy is convincing some traders that the Federal Reserve will raise interest rates for longer, sending the dollar surging and the Asian currency index to its lowest since November.
That means policymakers in the region, who have been burning through their reserves to support national currencies in the past year, are likely to once again step up to battle speculators.