Investing.com– Most Asian currencies were slightly lower on Tuesday as the dollar strengthened ahead of testimony from Federal Reserve Chairman Jerome Powell, while the yen held near a 38-year low.

Sentiment towards Asia also remained uncertain due to lingering concerns about recent European import tariffs on China, which could trigger retaliatory action from Beijing and trigger a trade war.

Asian trade rose slightly, stabilising after hefty losses last week as bets on a Fed rate cut rose.

is set to provide more clues on that trend later Tuesday. In addition to Powell, data is also due later in the week, while a number of other Fed officials are also expected to speak.

Japanese yen feeble as USDJPY recovers 161

The yen continued to lag behind its Asian peers, rising 0.1% on Tuesday to above 161 yen.

The currency found little support as a series of frail economic data from Japan fueled concerns that the Bank of Japan will have circumscribed room to manoeuvre in raising interest rates further.

Although the latest average cash earnings data showed overall wages rising, the reading was still weaker than expected in May. Other recent readings on the Japanese economy also pointed to continued weakness.

This caused investors to largely abandon the yen, and constant warnings about government intervention in the currency market went largely unheeded.

Chinese Yuan Weak, USDCNY Near 7-Month High

The Chinese yuan was also among the worst-performing currencies in recent sessions, with the currency pair up 0.1% to near a seven-month high.

The yuan suffered mainly on growing concerns about a trade war with the West, after the EU imposed tariffs on Chinese imports of electric vehicles despite objections from Beijing.

Markets have now begun to watch the impact of imports and whether China will retaliate.

Declining optimism about China’s economic recovery has also weighed on the yuan in recent weeks, especially after a series of frail data through June. This week, the focus has been on upcoming data for more clues about the economy.

Broader Asian currencies ranged flat to low. The Australian dollar was flat after data showed consumer sentiment in the country deteriorated further in early July.

The South Korean won remained flat, as did the Singapore dollar.

The value of the Indian rupee has increased slightly and remains close to record levels.