Investing.com – Most Asian currencies fell on Friday, with the South Korean won falling on ongoing political unrest and the Japanese yen rising on bets on an interest rate hike following inflation readings from Tokyo.

Asian trade rose, remaining near a two-year high reached last week. It also marked itself higher.

Most Asian currencies were set for a weekly decline after pointed losses last week when the Federal Reserve forecast fewer interest rate cuts in 2025. The Fed’s forecasts gave the dollar renewed strength and created downward pressure on Asian currencies.

Japanese yen rises on bets on interest rate hike

The Japanese yen pair fell 0.3% on Friday.

in the Japanese capital increased more than expected in December due to increased price pressure, government data showed on Friday, maintaining the chances of a short-term interest rate augment by the Bank of Japan (BoJ).

Some Bank of Japan policymakers saw conditions favoring an interest rate augment in the near future, according to a summary of views from the December meeting, with one predicting action “in the near future.”

Other data on Friday showed the country’s inflation rate fell in November, but at a slower-than-expected pace from the previous month on pent-up foreign demand.

Asia FX under pressure as dollar remains near two-year high

The Indian rupee fell further against the US dollar after touching a record low in a valuable session. The pair rose 0.2% to 85,713 rupees.

The onshore Chinese yuan pair was largely subdued on Friday.

Chinese data showed they fell at a slower pace in November, providing some relief to the struggling sector, although frail domestic demand continues to hamper recovery efforts.

The Singapore dollar pair rose by 0.1%, while the Australian dollar fell slightly,

The Philippine peso pair fell by 0.4%, while the Indonesian rupiah pair rose by 0.4%.

The US dollar remains powerful, driven by the Federal Reserve’s hawkish stance on interest rates through 2025 and expectations of higher inflation and powerful economic performance under the recent Donald Trump administration.

South Korea’s victory comes amid deepening political unrest

The South Korean won pair rose 0.7% on Friday, following the same gain in the previous session. The currency was expected to lose almost 2.5% within a week.

South Korea’s acting president, Prime Minister Han Duck-soo, will face an impeachment vote on Friday amid a political crisis sparked by the Constitutional Court’s first hearing on the short-lived martial law imposed by President Yoon Suk Yeol.

The push to impeach Han has deepened the crisis, putting the country’s democracy in uncertain waters and raising concern among allies.