Asia FX weak amid hawkish Fed outlook; Japan’s strong CPI fuels rate hike bets

Most Asian currencies muted amid US tariff, rate jitters

Trump’s recent announcement of impending tariffs on automobile, semiconductor, and pharmaceutical imports has heightened market caution.

Meanwhile, recent comments from Fed Governor Adriana Kugler further stoked caution among investors, as she supported the central bank’s stance to delay rate cuts in light of sticky inflation.

The ambiguity around Trump’s plans has heightened the Fed’s hesitation to implement rate cuts in 2025.

The Chinese yuan’s offshore pair USD/CNH edged 0.1% higher, while the Singapore dollar’s USD/SGD was largely unchanged.

The Indonesian rupiah’s USD/IDR pair rose 0.1%, while the Indian rupee’s USD/INR pair was muted.

The Australian dollar’s AUD/USD pair edged up 0.1%.

The South Korean won’s USD/KRW pair was also steady ahead of the Bank of Korea’s interest rate decision due next week.

The BOK is expected to lower its benchmark interest rate by 25 basis points on Tuesday to help stimulate an economy that saw minimal growth last quarter, according to a Reuters poll.