The yen appreciated beyond 155 per dollar for the first time since early June, as traders recalibrated their positions in anticipation of a potential rate hike by the Bank of Japan (BOJ) in the coming months, if not at its policy meeting next week. Although only about 30% of BOJ analysts expect a rate increase on July 31, over 90% acknowledge the possibility of such a move.
Conversely, the New Zealand dollar dropped to its weakest level in nearly three months, as lower domestic bond yields dissuaded carry trade investors.
In the United States, the market is bracing for a seasonally weak period, with the upcoming presidential election likely to amplify volatility. Treasuries remained stable during the Asian session as investors awaited U.S. debt auctions on Wednesday and manufacturing PMI data. Oil prices rebounded, breaking a streak of losses, following an industry report that U.S. crude inventories fell for a fourth consecutive week. Gold maintained its gains ahead of key U.S. economic data expected this week, which is anticipated to bolster the case for interest-rate cuts.