Asia FX Holds Losses After Hot U.S. CPI; Trump-Xi Meeting in Focus

Asian currencies remained under pressure after U.S. CPI surprised to the upside (core +0.4% m/m, 3.3% y/y), reinforcing expectations the Fed will keep policy restrictive and boosting the U.S. dollar. The yen weakened past the 152 level vs the dollar, while other Asian currencies such as the won, baht and rupiah fell. Markets now see a lower probability of a rate cut before June (CME FedWatch), reducing the appeal of emerging-market assets. Adding to risk, a potential Trump-Xi meeting could swing trade policy sharply — from de-escalation that would help Asian FX to renewed tariff threats (Trump has floated a 60% tariff) that would further pressure regional currencies. Regional central banks (BoJ, Bank of Korea, Bank Indonesia) face a trade-off between defending currencies and supporting growth; authorities have intervened to smooth volatility. Overall, the piece frames a bearish near-term outlook for Asian FX until clearer signals on U.S. monetary policy and U.S.-China trade rhetoric emerge.