Investing.com – Most Asian currencies fell slightly on Thursday, extending their subdued performance amid concerns over new U.S. tariffs under Donald Trump’s administration, while attention turned to the political meeting of the Bank of Japan which is expected to begin later today.
The BoJ is expected to raise rates significantly at the end of its two-day meeting on Friday.
Analysts say recent inflation and wage data are encouraging and support the central bank’s decision to raise interest rates.
Media reports showed that the BoJ would likely signal further interest rate hikes at its meeting if the economy maintains its recovery.
The Japanese yen was largely subdued ahead of the rate decision.
Asian currencies are subdued on concerns over US tariffs
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 starting Feb. 1 and warned of possible taxes on the European Union.
Regional currencies faced downward pressure. If adopted on a large scale, these tariffs could have a substantial impact on most Asian currencies, given the region’s heavy reliance on trade with China.
The local Chinese yuan pair edged up 0.1%, while the offshore pair remained virtually unchanged.
The Malaysian ringgit pair rose 0.2%, a day after Bank Negara Malaysia remained flat for the 10th consecutive meeting.
Both the Australian dollar pair and the Singapore dollar pair were largely subdued.
The Indonesian rupee pair and the Indian rupee pair each fell 0.1%.
The South Korean won pair was slightly higher amid a continuing political crisis in the country.
US dollar faces headwinds from gradual imposition of tariffs
The dollar is under pressure as investors weigh the economic consequences of Trump’s gradual implementation of tariffs.
The greenback had fallen more than 1% earlier this week after Trump avoided detailing the tariffs, signaling they could come at a slower pace.
The index was largely muted in Asian trading, after rising a day earlier. increased slightly by 0.1%.
“Markets continued to unwind long dollar positions as US Treasuries enjoyed another strong session, and a delay in tariff announcements fuels some tepid optimism,” ING analysts said in a recent note.