Investing.com – Most Asian currencies moved lower on Thursday, extending their subdued performance amid concerns about new US tariffs under the Donald Trump administration, while attention shifted to the Bank of Japan policy meeting later in the day started.
The BOJ is widely expected to raise at the end of its two-day meeting on Friday.
Analysts believe that recent inflation and wage data have been encouraging and support the central bank’s decision to raise interest rates.
Media reports have shown that the BOJ is likely to signal further rate hikes at its meeting if the economy maintains its recovery.
The Japanese yen was largely muted ahead of the rate decision.
Asia FX subject to US rates
Other regional currencies were under pressure ahead of additional US tariffs.
After his inauguration on Monday, Trump signaled plans to impose 10% tariffs on Chinese imports from February 1 and warned of potential levies on the European Union.
Regional currencies faced downward pressure. If enacted at their full scale, these rates could have a substantial impact on most Asian currencies, given the region’s heavy dependence on trade with China.
The onshore pair of the Chinese yuan settled 0.1% higher, while the offshore pair was largely unchanged.
The Malaysian ringgit pair rose 0.2%, a day after Bank Negara Malaysia was stable for the 10th consecutive meeting.
The Australian Dollar pair and the Singapore Dollar pair were both largely muted.
The Indonesian rupiah pair and the Indian rupee pair each fell 0.1%.
South Korean Won’s pair was slightly higher amid an ongoing political crisis in the country.
US Dollar Faces Headwinds from Gradual Tariff Imposition
The dollar has faced pressure as investors assess the economic fallout from Trump’s gradual implementation of tariffs.
The greenback was down more than 1% at the start of the week after Trump avoided details on tariffs, indicating they could come at a slower pace.
It was largely muted in Asian trading after ticking higher a day earlier. rose 0.1% higher.
“Markets have continued to relax USD Long as US Treasuries had another strong session and a slowdown in rate announcements fueling preliminary optimism,” analysts said in a recent note.
