Asian FX volatility rises amid political uncertainty, equity strength

Asian currency markets experienced heightened volatility as political developments and robust equity performance created mixed trading conditions. The Japanese yen strengthened 0.5% against the dollar to 156.70 following intervention warnings from Tokyo officials. Meanwhile, emerging Asian currencies faced pressure from political probes and regulatory uncertainties, with the Thai baht weakening 0.3% and Malaysian ringgit down 0.2% against the greenback. Despite currency headwinds, regional equity markets posted strong gains, with the Nikkei 225 up 1.2% and Hang Seng advancing 0.9%, supported by technology sector optimism. The divergence between currency weakness and equity strength reflects capital flow complexities as year-end positioning intensifies. Traders are monitoring key support levels for USD/JPY at 156.50 and resistance for emerging market pairs. The mixed signals suggest continued volatility ahead, with political developments likely to drive short-term currency movements across the region.