investingLive Asia-Pacific FX news wrap: Gold & silver new record highs. Yen & yuan higher

Summary:

• Gold and silver surged, with gold nearing US$4,500 and silver pushing toward US$70 on safe-haven demand, lower real yields and US dollar weakness.

• The yen strengthened further, extending gains after FX warnings from Atsushi Mimura and Satsuki Katayama, pulling USD/JPY down to around 156.30.

• Japanese equities rose as JGB yields retreated from record highs, with the Topix nearing a record and support from Goldman Sachs’s Japan expansion plans.

• The onshore yuan firmed in spot trade despite a softer People’s Bank of China fixing, signalling tolerance for gradual CNY strength.

• The Australian dollar edged higher after Reserve Bank of Australia minutes reinforced a hawkish hold and debate over whether policy is still restrictive.

—

Precious metals extended their rally again today, with prices surging further. Gold pushed up toward US$4,500 without quite reaching the level as of writing, while silver also climbed sharply, topping out just shy of the US$70 handle.

Currencies also reflected a defensive tilt, with both the Japanese yen and the Chinese yuan strengthening. Yen gains continued following verbal intervention earlier in the week from Japan’s top currency diplomat Atsushi Mimura and Finance Minister Satsuki Katayama. The renewed warning against speculative and one-sided FX moves helped push USD/JPY down to around 156.30.

Japanese equities rose, aided by a pullback in domestic bond yields after a sharp spike earlier in the week. The Topix climbed to 3,422, moving closer to its recent record high of 3,434.6, while the tech-heavy Nikkei lagged amid lingering valuation concerns around AI-linked stocks. Sentiment was also supported by headlines that Goldman Sachs plans to expand acquisitions and investments in Japan’s corporate deals market by roughly US$5.1bn over the next decade, with a focus on mid-sized firms.

Japanese government bond yields declined across maturities as conditions stabilised following earlier record highs in two-, 20- and 30-year debt.

In China, the People’s Bank of China set its USD/CNY fixing at 7.0523, a near 15-month high for the onshore yuan. The fixing showed the largest weak-side deviation versus Reuters’ market estimate since November 2022, a signal the PBOC is leaning against rapid yuan appreciation. Even so, spot trading saw the onshore yuan strengthen past 7.03 per dollar, its firmest level since October 2024, reflecting broad dollar weakness.

The Australian dollar edged higher ahead of the release of the December Reserve Bank of Australia minutes. The minutes revealed discussion around the conditions under which the Bank might need to pivot back toward rate hikes in 2026 if inflation risks persist. While the Board reiterated its data-dependent stance, the tone remained hawkish, with debate centred on whether the current cash rate is still restrictive amid limited spare capacity.

Earlier, comments from US Treasury Secretary Scott Bessent added to policy uncertainty. Speaking on a podcast, Bessent said Fed Governor Steve Miran is likely to return to the White House early next year and questioned the precision of inflation targeting, while also flagging growing support among potential Fed chair candidates for scrapping the dot plot.

Geopolitically, President Donald Trump said the United States “needs Greenland for national security,” citing Russian and Chinese maritime activity near the territory.