ASIAN CURRENCIES DECLINE AS DOLLAR STABILIZES

USD/JPY, an inverse indicator of currency strength, rose 0.1% on Tuesday to trade above 156.

The pair recouped most of the losses incurred earlier in May when the government twice intervened in the foreign exchange market.

While traders now view 160 as a new milestone for government intervention, USD/JPY’s rapid rise despite the threat of intervention has raised fears that the government may intervene sooner.

Japanese producer price index data showed factory inflation was largely subdued in April, indicating slight inflationary pressures forcing the Bank of Japan to continue tightening policy.