Headline: Risk-Off Mood Lifts USD as Asia FX Slips; BoE Eyes Stablecoin Rules, BOJ Seen on Hold
Asian markets turned cautious midweek, driving a broad bid for the US dollar and pressuring commodity-linked currencies. The Australian dollar and New Zealand dollar led losses in Asia-Pacific FX, with the Canadian dollar also softer, as traders leaned into a risk-off tone. Sentiment was dented by reports that Beijing plans to extend its ban on Japanese seafood imports, adding a layer of trade uncertainty to an already fragile backdrop.
Policy headlines shaped the macro narrative. In Japan, a key adviser to Prime Minister Takaichi suggested the Bank of Japan is unlikely to lift rates before March, arguing policymakers need to assess whether a ¥20 trillion fiscal package meaningfully boosts demand. That view contrasts with forecasts for an earlier move as growth indicators soften, keeping the yen’s path tightly linked to rate expectations. In the UK, the Bank of England is preparing guardrails for systemic stablecoins—a step toward a regulated digital payments ecosystem that could set new standards for crypto-backed money and fintech integration.
Corporate and geopolitical developments rounded out the session. Tesla secured a ride-hailing permit in Arizona, opening the door to pilot robotaxi services and adding momentum to autonomous mobility ambitions. Meanwhile, an unannounced visit to Ukraine by the US Army Secretary and the Army Chief of Staff underscored persistent geopolitical risks—another factor supporting safe-haven demand and the dollar’s defensive appeal.
Key Points: – USD strength weighed on AUD, NZD, and CAD as risk-off sentiment returned in Asian trading. – Reports indicate China intends to maintain its ban on Japanese seafood imports, adding to trade tensions. – An adviser to PM Takaichi signaled the BOJ may wait until after March to consider rate hikes, pending fiscal impact. – The Bank of England is drafting rules for systemic stablecoins, advancing the UK’s regulated digital payments framework. – Tesla received an Arizona ride-hailing permit, paving the way for potential robotaxi operations. – High-level US military officials made an unannounced visit to Ukraine, reinforcing geopolitical uncertainty.
