Investing.com– Most Asian currencies edged lower on Friday as South Korea's gains fell amid continued political unrest, while the Japanese yen rose on rate hike bets after an inflation reading from Tokyo.
The rate was higher in Asian trade, staying close to the 2-year level it touched on last week. The tick was also higher.
Most Asian currencies were set for a weekly drop after heavy losses last week when the Federal Reserve expected fewer rate cuts in 2025. The Fed's outlook was on renewed strength to the dollar and downward pressure on Asian currencies.
The Japanese yen is rising on rate hike bets
The Japanese yen pair fell 0.3% on Friday.
in the Japanese capital grew more than expected in December due to increased price pressures, government data showed on Friday, keeping alive the possibility of a near-term rate hike by the Bank of Japan (BoJ).
Some Bank of Japan policymakers saw conditions aligning for a near-term rate hike, with one predicting action “soon,” according to a summary of comments from the December meeting.
Other data on Friday showed the country's output fell in November, but contracted at a slower-than-expected pace from the previous month amid subdued foreign demand.
Asia FX under pressure as dollar remains near 2-year high
The Indian rupee fell further against the US dollar after hitting session lows. The pair rose 0.2% to 85.713 rupees.
The Chinese yuan pair landed largely quietly on Friday.
Chinese data showed a slower pace in November, bringing some relief to the struggling sector, although weak domestic demand continues to hamper recovery efforts.
The Singapore dollar pair rose 0.1%, while the Australian dollar was slightly lower,
The Philippine peso pair fell 0.4%, while the Indonesian rupiah pair rose 0.4%
The US dollar has remained strong, driven by the Federal Reserve's hawkish stance on rates through 2025 and expectations of higher inflation and strong economic performance under the incoming Donald Trump administration.
South Korea won handouts amid growing political unrest
The South Korean pair of winners rose 0.7% on Friday, after jumping the same amount in the previous session. The currency was expected to lose nearly 2.5% for the week.
South Korea's acting president, Prime Minister Han Duck-soo, faces an impeachment vote on Friday amid a political crisis that has sparked the first Constitutional Court hearing on the President's short-term martial law Yoon Suk Yeol.
The attempt to impeach Han has deepened the crisis, putting the country's democracy in uncertain waters and drawing concern from allies.
