Market holidays in China, Taiwan, and South Korea kept volumes thin

Most Asian currencies kept to a tight range in holiday-thinned trade on Monday, while the yen weakened after dismal economic growth data for the fourth quarter.

Market holidays in China, Taiwan, and South Korea kept volumes thin.

The yen’s USD/JPY pair gained 0.2% after gross domestic product data showed the economy grew substantially less than expected in the fourth quarter.

The weak GDP print was driven chiefly by softer-than-expected business spending, while export growth and private consumption also remained on the backfoot.

Monday’s data indicated that fiscal stimulus passed in late-2025 had done little to spur growth so far, and that Prime Minister Sanae Takaichi will likely have to unlock more spending to boost growth.

Takaichi is viewed as having a clear legislative path towards unlocking more fiscal spending after her ruling coalition won a supermajority in Japan’s lower house.

But concerns over stretched fiscal spending are expected to weigh on the yen. Weakness in the Japanese economy also diminishes the prospect of more interest rate hikes by the Bank of Japan.

Broader Asian currencies moved little in holiday-thinned trade. The Australian dollar’s AUD/USD pair gained 0.2%, remaining close to three-year highs following a host of hawkish signals from the Reserve Bank last week.

The Indian rupee’s USD/INR pair added 0.2% to near 90.7 rupees, while the Singapore dollar’s USD/SGD pair advanced slightly after non-oil exports data read weaker than expected for January.

Chinese markets will be closed for the remainder of the week. But the yuan’s USD/CNH offshore pair dropped 0.2% amid expectations of increased yuan demand during the Lunar New Year holiday.