Asian currencies weaken on US rate rise and high oil prices

Asian currencies experienced widespread depreciation following the US Federal Reserve's decision to raise benchmark interest rates by a quarter of a percentage point. The US dollar strengthened 0.7 percent against a basket of trading partners, driving the Japanese yen past ¥156 per dollar as the Japanese currency weakened by more than 1.1 percent in the aftermath of the Fed announcement. The resulting currency moves have intensified pressure on the Bank of Japan ahead of its policy meeting, where officials are widely expected to lift the key interest rate by 25 basis points to 1.25 percent, marking the highest level in three decades. Some hawkish policymakers within the central bank have even advocated for a larger 50 basis point rate hike to address mounting domestic inflation pressures. Compounding the strain from the Fed's monetary tightening, elevated crude oil prices have created an additional headwind for Asian economies, which rely heavily on energy imports. With Brent crude trading around $105.80 per barrel, regional currencies including the South Korean won, Indian rupee, Australian dollar, and New Zealand dollar all retreated.