Currencies

Most Asian currencies edged higher on Friday as the dollar weakened on persistent expectations of a rate cut by the U.S. Federal Reserve in December, while the Japanese yen surged after hotter-than-expected inflation data from Tokyo.

The yen weakened slightly through the Asia session. But at 151.59 per dollar, it is up 2.4% this week and has recovered losses suffered since the U.S. election. Markets see about a 55% chance the Bank of Japan hikes rates next month.

Most Asian currencies were largely unchanged on Wednesday, while the Japanese yen firmed against the dollar as markets were worried about the implications of new tariffs under incoming U.S. President Donald Trump. 

Most Asian currencies edged lower on Tuesday, with the Chinese yuan dropping to a four-month low against a stronger dollar after U.S. President-elect Donald Trump said he will impose additional trade tariffs on China, Mexico, and Canada.

The dollar retreated on Monday after surging for the past eight weeks. Bessent’s nomination as Treasury Secretary weighed on the dollar, amid some bets that he will be a voice of moderation in Trump’s administration.

Regional currencies have lost ground over the last few weeks, pressured by the strength in the dollar, as caution over a slower pace of interest rate cuts by the Federal Reserve weighed on sentiment. Traders were also on edge over just what U.S. President-elect Donald Trump’s policies will entail for Asian countries, especially China.

The U.S. dollar paused its climb on Thursday as traders awaited more clarity on U.S. President-elect Donald Trump’s proposed policies and sought to second-guess the prospects of less aggressive interest rate cuts from the Federal Reserve.

Most Asian currencies were also nursing steep losses over the past two weeks as the dollar shot up to one-year highs after Trump’s election. The Japanese yen was among the worst-hit by this trade.

The yen got some much-needed respite on Tuesday as it steadied on the stronger side of 155 per dollar thanks to a pullback in the U.S. currency, which ran into profit-taking after a stellar rally that saw it scale a one-year high.

The dollar rose against the yen on Monday after Japan’s top central banker flagged further policy tightening ahead but left open the question of timing, leaving the market no clearer on whether a move would come next month.