Commentary
Recently, Asian currencies have experienced quite a sharp depreciation. This was led by the Japanese Yen (JPY) depreciation against the backdrop of a strong U.S. dollar. JPY has been the focus because it is the only major global currency with almost zero interest rates. Under such a “rate disadvantage,” JPY depreciation has been well anticipated. The depreciation seemed to infect other Asian currencies as the dollar index (DXY) edged to above 106. Since China, the leading Asian country is now in deep trouble, the market is speculating about another Asian crisis.
