SINGAPORE Reuters - Sterling was higher on Monday after British Prime Minister Liz Truss reversal of her government's economic plan, while the yen was near a 32 year low as markets waited for intervention from Japanese authorities.
The pound went up 0.6% to $1.1245 in early Asia trade after Truss said that Britain's corporation tax will rise to 25% from April next year instead of 19% as part of her government's initial mini-budget.
Hunt, a former foreign and health minister, has promised to restore Britain's economic credibility by fully accounting for the government's tax and spending plans, while insisting that his boss Liz Truss is in charge of the country.
British lawmakers will try to oust Truss this week despite Downing Street's warning that it could trigger a general election, the Daily Mail reported.
After the Bank of England ended its emergency gilt market support on Friday, all eyes are on how the UK government bond market will trade.
Carol Kong, a currency strategist with Commonwealth Bank of Australia CBA, said if we see a surge in gilt yields, that would show that markets remain very skeptical about the debt sustainability in the UK. The yen was close to its 32 year low of 148.86 hit on Friday, thanks to rising U.S. Treasury yields and the surging dollar, but it was not much changed by the fact that it was last 0.2% stronger at 148.48 per dollar.
The U.S. dollar index, measured against a basket of currencies, including the yen, fell to 113.02.
The Bank of Japan Deputy Governor Masazumi Wakatabe said on Saturday that the yen's recent fluctuations were clearly too rapid and too one-sided while top currency diplomat Masato Kanda also signalled that the country would respond strongly to any excessive currency fluctuations.
According to CBA's Kong, given the strong language we've heard from various government officials, the risk is very high that we're going to see another BOJ intervention very soon, given the strong language we've heard from various government officials.
Japan last month intervened to buy the yen for the first time since 1998, after the Bank of Japan stuck with ultra-low interest rates, which caused the yen's slide to 145.90 per dollar.
The euro gained 0.26% to $0.9748 while the Australian and New Zealand dollar bounced back a bit from recent losses.
The Aussie was up 0.35% at $0.6225, while the kiwi was 0.23% higher to $0.5575, after having both fallen to new 2 -- 1 2 year lows last week.
The Chinese offshore currency was bought 7.2150 per dollar.
After he left the Communist Party Congress on Sunday, Chinese President Xi Jinping called for a world-class military and praised the fight against COVID 19, as he reiterated the validity of China's zero-COVID policy.