Yen weakens as Asian currencies follow suit; gold falls on US-Iran talks

The yen faces renewed pressure while the Australian dollar shines, as US-Iran talks advance and other Asian currencies feel the yen's drag.

AUG/5/2026 · 2 min readBy the ForexCommand team · Methodology · Standards

The yen faces renewed pressure while the Australian dollar shines, as US-Iran talks advance and other Asian currencies feel the yen's drag.

Asia's currency dynamics

The yen is the weakest currency on an intraday basis, with US Treasury Secretary Bessent reporting that many Asian currencies, including the won and yuan, now follow the yen. This comes despite its strength yesterday, following intervention efforts.
Japan's services PMI growth slowed in July, though rising real wages for a sixth consecutive month support future rate hike arguments from the Bank of Japan, whose minutes indicate a focus on inflation risks.
The New Zealand dollar weakened below 0.5900 after its unemployment rate rose to 5.6% in the second quarter, exceeding the 5.4% forecast and prior 5.3%. This follows an initial rise in anticipation of the employment data.
The Australian dollar is the strongest currency today, buoyed by its services PMI reaching a six-month high of 53.6 as new orders returned.
The Chinese yuan is strengthening towards 6.7300 against the US dollar, according to UOB.

Gold fell below $4,100, extending its recent decline, as markets focused on reports that US Secretary of State Rubio sees US-Iran talks advancing, with an agreement potentially "very soon."
Oil extended its collapse, following reports of the Strait of Hormuz reopening.
The Mexican peso rose to one-month highs on speculations regarding a Hormuz agreement.

Federal Reserve's Schmid stated that stricter monetary policy is required to bring inflation back to the 2% target.
The Reserve Bank of India (RBI) is set to maintain interest rates due to persistent inflation risks.
Our sentiment gauge, FSI, stands at 63 (Greed), while the MRS is 64 and the CTS remains high at 80.