Currencies were pressured by weak risk appetite as markets fretted over the status of more peace talks between Iran and the U.S., which appeared unlikely in the near-term

Most Asian currencies weakened on Friday amid persistent uncertainty over the Iran-U.S. war.

Currencies were pressured by weak risk appetite as markets fretted over the status of more peace talks between Iran and the U.S., which appeared unlikely in the near-term.

Concerns over energy-driven inflation eliciting hawkish world central banks also weighed.

The yen dropped even as data showed consumer inflation picked up more than expected in March, as markets remained convinced that the Bank of Japan will not raise interest rates next week.

The yen’s USD/JPY pair added nearly 0.2%, and remained close to its weakest levels since July 2024.

Friday’s data showed inflation picking up due to some increases in fuel and transportation costs, likely stemming from the Middle East war. But a bulk of the price increases were quashed by continued subsidy measures from Tokyo to curb the high cost of living.

The data comes just days before a Bank of Japan meeting, where the central bank is widely expected to leave interest rates unchanged. But Capital Economics analysts said the BOJ could signal a willingness to hike interest rates later this year, with a June hike appearing likely.

The yuan’s USD/CNY pair added almost 0.2% on Friday and was set for mild weekly gains.

The Singapore dollar’s USD/SGD pair rose slightly, as did the won’s USDKRW pair.

The Australian dollar’s AUDUSD pair was flat, while the Indian rupee’s USD/INR pair advanced 0.2% and pushed further above the 94 rupee level.

The rupee came back in sight of recent record lows against the dollar after the Reserve Bank earlier this week loosened some measures aimed at supporting the currency.