On July 20, the Japanese yen unexpectedly strengthened after the upper-house elections, impacting the currency markets in the region.
Strengthening of the Japanese Yen
The Japanese yen unexpectedly strengthened by 0.22% against the US dollar after the July 20 elections, reaching 148.49 yen per dollar. This increase followed two weeks of decline as investors feared that Shigeru Ishiba's government would lose its parliamentary majority. However, despite the electoral losses, the yen found buyers as it was seen as a safe asset amid global instability.
Stability of the Yuan
In China, the People’s Bank of China decided to keep both the 1-year and 5-year loan prime rates steady, adding to the cautious tone across regional markets. The offshore yuan barely moved, nudging up just 0.02% to 7.1788 yuan per dollar, underscoring Beijing's cautious stance regarding further monetary policy changes.
Singapore Dollar and Market Trends
The Singapore dollar also faced pressure as the US dollar strengthened. The White House issued threats of new tariffs, negatively impacting Singapore's economy. Nevertheless, the Straits Times Index showed sustained growth, reaching a new record high. Major movers included Mapletree Logistics Trust and Yangzijiang Shipbuilding, which demonstrated solid performances.
The yen's resilience amid electoral pressures, along with the stability of currencies in other Asia-Pacific countries, underscores growing economic and trade uncertainties.
