Asia FX Extends Losing Streak on Trump Tariff Fears; BoJ rate decision in focus By Investing.com
Investing.com – Most Asian currencies were lower on Thursday, extending their muted performance on concerns over new US tariffs under the Donald Trump administration, while attention turned to the Bank of Japan’s policy meeting due to start later in the day.
The BoJ is expected to raise at the end of its two-day meeting on Friday.
Analysts believe that recent data on inflation and wages were encouraging and supported the central bank’s decision to raise interest rates.
Media reports indicated that the BoJ is likely to signal further interest rate hikes at its meeting if the economy continues to recover.
The Japanese yen was largely muted ahead of the rate decision.
Asian FX subdued on US tariff concerns
Other regional currencies were under pressure in anticipation of additional US tariffs.
After his inauguration on Monday, Trump signaled plans to impose 10% tariffs on Chinese imports starting February 1 and warned of possible European Union sanctions.
Regional currencies are facing downward pressure. If implemented in full, these tariffs could have a significant impact on most Asian currencies, given the region’s heavy dependence on trade with China.
The onshore pair of the Chinese yuan rose 0.1%, while the offshore pair remained largely unchanged.
The Malaysian ringgit pair rose 0.2%, a day after Bank Negara Malaysia remained flat for the 10th consecutive meeting.
The Australian dollar pair and the Singapore dollar pair were mostly muted.
The Indonesian rupiah pair and the Indian rupee pair each fell 0.1 percent.
The South Korean won pair was slightly higher amid the country’s ongoing political crisis.
The US dollar is facing problems due to the gradual imposition of tariffs
The dollar faced pressure as investors weighed the economic consequences of Trump’s gradual implementation of tariffs.
The dollar fell more than 1% earlier in the week after Trump avoided detailing the tariffs, signaling they may come more slowly.
During Asian trading, the value was largely muted, after surging a day earlier. it increased by 0.1 percent.
“Markets continued to ease USD debt as US Treasuries had another strong session and the delay in tariff announcements is fueling some optimism,” ING analysts said in a recent note.
