TOKYO -- Asian currencies are mostly undervalued against the U.S. dollar, and although the yuan does not fall into this category it is trending weaker and could become a point of contention in the U.S.-China trade war, according to an in-depth analysis by Nikkei and the Japan Center for Economic Research.
While the yen had been undervalued since 2015, this week it strengthened to the lower 107 range against the dollar, right where its equilibrium exchange rate -- as calculated by Nikkei and the JCER based on the most recent macroeconomic data -- says it should be. Five other Asian currencies remain undervalued compared to the equilibrium exchange rate calculated from January-March data.
