Asia FX: PBOC sets yuan fixing at strongest since March 2023, Nikkei and KOSPI gain
The PBOC set its yuan fixing at the strongest level since March 2023, supporting Asian currencies and lifting the Nikkei and KOSPI as the Trump-Xi summit opened with conciliatory tones.
The People's Bank of China set its onshore yuan fixing at the strongest level since March 2023, a move that lifted the offshore yuan and supported Asian currencies broadly. The development came as world leaders struck a conciliatory tone at the opening of the Trump-Xi summit in Beijing, with Chinese President Xi Jinping stating that the two nations "should be partners, not rivals."
For foreign exchange and currencies traders, the PBOC's fixing is a clear signal of Beijing's intent to manage the yuan's depreciation expectations, at least in the near term. A stronger yuan typically reduces the cost of imports for China and can ease capital outflow pressures, which in turn supports regional currencies like the Korean won and the Singapore dollar. The positive sentiment also spilled over into equity markets, with Japan's Nikkei 225 and South Korea's KOSPI both gaining. Live FX prices and charts on NowPrice show how the market is reacting to these developments in real time.
Looking ahead, traders will focus on the outcomes of the Trump-Xi summit, particularly any concrete agreements on trade and tariffs. The PBOC's future fixing levels will also be closely watched as a gauge of policy direction. Any escalation in trade tensions could reverse the current risk-on mood, while a breakthrough could further boost Asian currencies and equities.