Investing.com – Most Asian currencies edged lower on Thursday, extending their subdued performance amid concerns over new US tariffs under the Donald Trump administration, as attention shifted to the Bank's policy meeting Japan which was to start later in the day.
The BoJ is widely expected to hike 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 a further increase in interest rates at its meeting if the economy continues to hold back.
The Japanese yen was largely depreciated ahead of the rate decision.
Asia FX took control of US tariff concerns
Other regional currencies were under pressure in anticipation of additional US tariffs.
After his inauguration on Monday, Trump announced plans to impose 10% tariffs on Chinese imports from February 1, and warned of possible tariffs on the European Union.
Regional currencies were under pressure. If implemented at full scale, these tariffs could have a significant impact on most Asian currencies, as the region is heavily dependent on trade with China.
The onshore Chinese yuan pair entered 0.1% higher, while the offshore pair was largely unchanged.
The Malaysian ringgit pair rose 0.2%, a day after Bank Negara Malaysia held steady for the 10th straight meeting.
The Australian dollar pair and the Singapore dollar pair were both largely quiet.
The Indonesian rupiah pair and the Indian rupee pair entered 0.1% lower, each.
South Korea's pair of winners were slightly higher amid the country's ongoing political crisis.
The US dollar is facing headwinds from the gradual introduction of tariffs
The dollar has been under pressure as investors assess the economic consequences of the gradual implementation of Trump's tariffs.
The greenback had fallen more than 1% at the start of the week after Trump avoided details on tariffs, signaling they could come at a slower pace.
This was largely quiet during Asian trading, after being higher a day earlier. 0.1% higher than normal.
“Markets have continued to long the USD as US Treasuries had another strong session, and delays in tariff announcements are fueling optimism,” ING analysts said in a recent note. .
