Investing.com– Most Asian currencies rose on Wednesday as the dollar fell following a heated U.S. presidential debate. Attention now turns to key inflation data due later in the day.

The Japanese yen was one of the biggest beneficiaries of the deal, with increased demand for safe-haven assets following the debate pushing the yen to its strongest level since early January. The yen also benefited from some hawkish comments from Bank of Japan officials.

Broader Asian currencies rose on Wednesday, taking some relief from a weaker dollar. But regional markets continued to suffer bulky losses over the past week amid weakening risk appetite.

Dollar falls after presidential debate; CPI expected

Both currencies fell about 0.2% in Asian trade, with losses for the US dollar coming after a heated presidential debate between Kamala Harris and Donald Trump.

The debate deepened expectations for the hotly contested 2024 presidential race, which could pose a major point of uncertainty for markets given the contrasting views on policies promoted by both candidates. Harris and Trump veered from the topics presented to engage in personal attacks on each other.

The dollar also fell ahead of the release of key inflation data later in the day, which is widely expected to provide further guidance on interest rates.

The reading came just a week before the central bank cut interest rates by at least 25 basis points.

Japanese yen at 8-month high on demand for safe-haven assets and BOJ’s hawkish talk

The yen was the best performer in Asia, falling 0.8% to 141.38 yen, its lowest since early January.

The currency gained on some safe-haven holdings as uncertainty surrounding the US election increased following Tuesday’s debate.

However, the main argument supporting the yen was hawkish comments from Bank of Japan Council member Junko Nakagawa, who said the central bank would continue to raise interest rates if inflation was in line with forecasts.

Nakagawa’s comments came after a series of hawkish signals from the BOJ and were also made just a week before the BOJ meeting. Investors are wary of another rate hike by the central bank, following a 15 basis point hike in behind schedule July.

Asian currencies posted modest gains as attention focused on the upcoming US CPI reading.

The Chinese yuan fell 0.1%, but the yuan lagged behind as U.S. policymakers proposed more trade curbs on Beijing.

The South Korean won fell 0.3%, while the Singapore dollar lost 0.2%.

The Indian rupee stabilised at Rs 84, while the Australian dollar remained unchanged after falling from a nine-month high last week.