Asian currencies mixed as dollar holds two-month high, yen stays near lows

Asian currencies traded mixed on Thursday, with the U.S. dollar holding near a two-month high due to stronger U.S. economic data reviving inflation concerns and boosting rate-hike bets. The Japanese yen steadied near a three-week low after Japan returned from holidays, while South Korean markets were closed for the Chuseok holiday.

The dollar's gains were fueled by a stronger-than-expected U.S. manufacturing reading and a poorly received $70 billion five-year Treasury auction, which pushed the five-year yield above 5% for the first time since 2007. Fed Governor Michael Barr suggested that a strong economy and rising inflation risks could require further rate hikes, increasing the chances of an October rate hike.

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