Most Asian currencies edged higher on Friday, positioning for weekly gains, as the US Dollar Index slipped 0.2% to 98.735, placing the greenback near a three‑month low and on track for an almost 1% weekly decline. The US Treasury announced on Wednesday that it has doubled its planned buybacks of longer‑dated debt, increasing the size to at least $4 billion per operation starting in September, up from the previous $2 billion. Despite the intervention, US Treasury yields resumed their upward trajectory, with the 10‑year yield hovering around 4.70% and the 30‑year yield near 5.25%, reflecting investor concerns over the United States’ large fiscal deficit and rising debt levels.
In Japan, core consumer price inflation accelerated to 1.8% year‑on‑year in July from 1.6% in June, with core inflation (excluding fresh food and energy) rising to 1.9% from 1.7%. The data reinforced market expectations that the Bank of Japan could raise its policy rate from 1% to 1.25% at its September meeting, although core inflation remains below the BOJ’s 2% target for a seventh consecutive month. Separate private‑sector data showed Japan’s manufacturing PMI expanding, with new orders increasing at the fastest pace since January 2018.
Among the regional currencies, the South Korean won was the top performer, with the USD/KRW pair falling 0.9% to its lowest level since September 2025 and setting up for a 2.5% weekly decline. The Australian dollar appreciated, with the AUD/USD pair up 0.4% and on track for nearly a 1% weekly gain. The Chinese yuan’s onshore USD/CNY pair traded flat, heading for a modest 0.3% weekly fall, while the Singapore dollar’s USD/SGD pair edged down 0.2% and is expected to decline 0.7% for the week.
The Indian rupee, however, bucked the regional trend. The USD/INR pair traded flat and is projected to rise 0.3% for the week, despite the broader dollar weakness. The rupee’s pressure stems from higher crude oil prices and importer hedging activity, and limited support from Reserve Bank of India interventions.
Crude oil prices added to the backdrop, with Brent trading just below $94 a barrel after a more than 6% weekly increase, contributing to pressure on oil‑importing Asian economies amid heightened tensions surrounding the US‑Israeli conflict with Iran.