Asian currencies showed mixed movements on Tuesday as the U.S. dollar maintained its strength ahead of the Federal Reserve's decision later this week. The Japanese yen weakened further, giving up some of its recent gains as investor risk appetite improved. The USD/JPY pair rose 0.13% to 157.70, extending the yen's decline after it had strengthened last week due to concerns over artificial-intelligence stocks.
The yen had been one of the strongest-performing major currencies last week as investors sought safer assets amid AI-related equity valuation worries. However, this demand has since eased, leaving the yen vulnerable ahead of a series of central-bank decisions that could reshape global interest-rate outlooks.
The Indonesian rupiah remained under pressure near record lows, with the USD/IDR pair rising 0.2% to 18,129.1. The rupiah has lost around 8% against the dollar this year, making it one of Asia's weakest performers alongside the Philippine peso. Elevated global bond yields, higher oil prices, and concerns over Indonesia's potential reclassification by MSCI have contributed to foreign outflows and selling pressure on the currency.
Bank Indonesia has pledged to adjust its policy tools to maintain rupiah stability, though it kept its benchmark rate at 5.75%. The central bank raised its deposit facility rate to 5.00% and strengthened incentives to attract foreign capital and support the rupiah. Other Asian currencies also traded mixed, with the Chinese yuan steady and the South Korean won strengthening modestly.