Middle East risks remained a key concern for markets

Most Asian currencies edged higher on Monday as the dollar slid, while the yen strengthened slightly despite weaker-than-expected Japanese GDP figures.

The yen’s USD/JPY pair edged down 0.2% to near 159 yen.

Data on Monday showed that Japan’s economy expanded at an annualised 1.1% in the second quarter, below a 2.0% market forecast and down from a revised 1.9% expansion in the previous quarter.

On a quarterly basis, GDP rose 0.3%, also missing expectations for 0.5% growth.

Weak private consumption and a decline in capital spending weighed on growth, although exports remained resilient, helped by demand for hybrid vehicles and semiconductor equipment.

The won’s USD/KRW pair dropped 0.2%.

The yuan’s onshore pair USD/CNY traded largely flat, while the Singapore dollar’s USD/SGD ticked down 0.1%.

The Australian dollar’s AUD/USD pair added 0.2%.

The Indian rupee, however, faced pressure despite the weaker dollar. The USD/INR pair advanced 0.2% as the Reserve Bank of India unexpectedly shortened the deadline for banks to use a discounted foreign-exchange swap facility for non-resident deposits.

The RBI’s decision came after inflows through the facility exceeded $50 billion.

Middle East risks also remained a key concern for markets. Hopes for an Iran-U.S. agreement to reopen the Strait of Hormuz have faded, while tanker traffic through the waterway has fallen sharply.

Iranian Foreign Minister Abbas Araqchi said over the weekend that Tehran had not decided to resume talks with Washington, while U.S. President Donald Trump urged Americans to accept higher gasoline prices as the conflict continues.

The US Dollar Index declined 0.1% to 99.52 by 3:54 GMT, after settling 0.3% lower on Friday.