Asia FX extends losing streak on Trump tariff fears; BoJ Rate Decision Focus on Investing.com

Investing.com – Most Asian currencies were lower on Thursday, extending their weaker performance amid concerns over new US tariffs by the Donald Trump administration, while attention turned to the Bank of Japan’s policy meeting scheduled to begin later in the day.

Boje is widely expected to leave at the end of the 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 suggest that the BoJ will signal further interest rate hikes at a meeting if the economy continues to recover.

The Japanese yen was largely muted ahead of the rate decision.

Asia FX lost on US tariff concerns

Other regional currencies were under pressure in anticipation of further US tariffs.

After his inauguration on Monday, Trump signaled plans to impose 10% tariffs on Chinese imports from February 1 and warned of possible tariffs on the European Union.

Regional funds are under downward pressure. If fully implemented, these tariffs could have a significant impact on most Asian currencies, as the region is heavily dependent on trade with China.

The Chinese yuan onshore pair was up 0.1% while the onshore pair was little changed.

The Malaysian ringgit pair rose 0.2%, a day after Bank Negara Malaysia held steady for the 10th straight session.

The Australian dollar pair and the Singapore dollar pair were both largely muted.

The Indonesian rupiah pair and the Indian rupee pair were each down 0.1%.

South Korea’s winning pair was slightly upbeat amid the ongoing political crisis in the country.

The US dollar faces headwinds due to the gradual imposition of tariffs.

The dollar came under pressure as investors assessed the economic impact of Trump’s gradual implementation of tariffs.

The greenback fell more than 1% earlier in the week after Trump dropped details on tariffs, suggesting they may come at a slower pace.

It was mostly muted during Asian trade after hitting a high a day earlier. It rose 0.1%.

“Markets continue to unload the US dollar as US Treasuries have another strong session, and the delay in tariff announcements is creating some temporary optimism,” ING analysts said.