Asia FX gains

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    India’s rupee rose for the fourth session in five on Friday as traders reported no sign of a return of central bank selling, leading gains across Asia against the dollar following a landmark speech by US Federal Reserve chief Jerome Powell.

    There was some strength for the dollar overnight as 10-year US bond yields pushed higher after Powell’s message that the central bank would allow inflation to run higher and do more to get it there in future.

    But it struggled throughout the Asian morning and currencies including the Singapore and Taiwan dollars, as well as China’s yuan, all traded a third of a percent or more higher.

    The rupee has been surging since Monday, when the Reserve Bank of India appeared to halt its recent policy of intervening heavily in the market against the currency, and hit its highest in nearly six months on Friday, on course for its best week since late December 2018.

    Traders said they expected the bank to return to the market soon, however, in part to ensure it builds more forex reserves, $60 billion to $535.35 billion so far this fiscal year.

    “The RBI must have let the currency appreciate to shatter the complacency but this may not be the case going forward and we might see the central bank again coming into action,” said Gaurang Somaiya, an FX analyst at Mumbai-based broker and trading firm Motilal Oswal Financial Services.

    The Indonesian rupiah took back early losses to trade 0.2 percent higher, while the Philippine peso also rose against the greenback.

    The jump in US bond yields, however, capped flows into riskier Asian assets, with yields on long-dated government bonds for Malaysia, Thailand and Indonesia all higher.

    Shares in Jakarta took a beating, as the country reported its biggest daily spike in coronavirus infections.

    Singapore shares snapped two sessions of losses, boosted by gains in the heavyweight financial sector, while Malaysian shares moved little on better-than-expected export data.