Investing.com– Most Asian currencies were slightly higher on Friday, gaining further ground as the dollar weakened ahead of key payrolls data and the Japanese yen rose sharply amid speculation about potential government intervention.

Elsewhere, support rose slightly as Labour looks set to secure a landslide victory in the UK general election.

And they fell to a three-week low in holiday-weakened trading, while rising expectations for interest rate cuts also weighed on the dollar. Attention now turns to key data due on Friday that will provide more clues about interest rates.

While a weakening dollar benefited Asian markets, gains were constrained as potential escalation of tensions between China and Taiwan weighed on sentiment.

Japanese Yen Rises, USDJPY Falls Amid Rumours of Intervention

The Japanese yen was among the best-performing currencies in Asia. The currency pair, which measures the number of yen needed to buy one dollar, fell 0.4% to 160.63.

The yen’s edged appreciation had sparked speculation that the Japanese government was intervening in currency markets to support the currency. The government had been expected to potentially intervene around the July 4 holiday in the US, taking advantage of lower trading volumes.

The yen’s recent weakening was driven by growing concerns that the Bank of Japan will have constrained room to tighten monetary policy further amid continued weakness in the Japanese economy.

Weak data for May on Friday strengthened this thesis.

China’s yuan remains unchanged as tensions in Taiwan rise

The Chinese yuan lagged behind its rivals, with its value hovering around seven-month lows.

Attitudes toward China have further deteriorated following reports that Beijing seized a Taiwanese fishing boat and sent planes into the Taiwan Strait.

The revelations follow an earlier report that Taiwanese companies were pulling their workers out of China after Beijing vowed harsh punishment for supporters of an independent Taiwan.

Any escalation of tensions with Taiwan could result in increased scrutiny by China and greater sanctions from the West.

The Taiwanese dollar fell 0.2%.

Other Asian currencies rose slightly as the US market holiday offered few trading cues. The Australian dollar rose 0.1%.

The South Korean won fell 0.1%, while the Singapore dollar fell 0.1%.

The Indian rupee fell slightly but remained close to recent record levels.