SINGAPORE: The dollar rose against the yen in volatile Asian trade Monday but all eyes were on the yuan as China moves to calm a stock market turmoil.
A massive plunge in Chinese stocks last week and a decline in the yuan after authorities weakened its value roiled global equities and further raised concerns about the growth slowdown in the world's second-biggest economy.
Despite China's efforts to bring calm, including setting the central rate for the yuan marginally higher, analysts said they needed to see more transparency in the foreign exchange policy.
"We reiterate that things remain fluid. Market volatility last week suggested that nobody really knows what or where the policy is right now," DBS Bank said in a market commentary.
"The market's message was loud and clear that more clarity was needed on China's transition towards a more market-determined exchange rate and an economy led by domestic demand," it added.
"We will continue to monitor developments closely and decide if more adjustments will be needed to our forecasts going forward."
At around 0345 GMT, the dollar was at 117.31 yen, up from 117.26 yen in late US trade Friday after a strong US jobs report in December.
The euro was changing hands at $1.0920, down from $1.0922, and at 128.0261 yen from 128.12.
Japanese financial markets were closed for a holiday.
The yen is considered a safe haven currency in the face of the China-led global stocks turmoil.
In other trades, the greenback was up against the New Zealand dollar, Taiwan dollar, South Korean won, Philippine peso, Indian rupee and the Malaysian ringgit.
It fell against the Australian and Singapore dollars, Indonesian rupiah, Chinese yuan and Thai baht.
But focus remained on the yuan because of its impact on the global markets.
"Asian currencies have been dragged lower amid (the) yuan depreciation, with Singapore dollar and Malaysian ringgit among the most impacted," banking group ANZ said.
It added that even if the current market turmoil keeps the US Fed from making any further increases in interest rates, "Asian currencies will likely remain on the back foot amid CNY (yuan) risk and portfolio outflows".
HSBC said the yuan's behaviour was difficult to predict.
"Different signals about foreign exchange policy have wrong footed market participants and we are wary in believing that an immediate calmness will soon emerge," HSBC said.
"In this context, we expect (yuan) volatility to remain high while depreciation pressures are likely to remain strong."
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