Most Asian currencies edged lower as the U.S. dollar firmed slightly, supported by easing geopolitical tensions. President Trump's decision to step back from tariff threats over Greenland reduced safe-haven demand, stabilizing broader markets. This shift helped the greenback gain against a basket of currencies, prompting traders to trim positions in regional units.

The Japanese yen weakened further, pressured by Prime Minister Sanae Takaichi's call for a snap election and expansionary fiscal proposals. Plans to suspend an 8% consumption tax on food have raised concerns about deficit financing, keeping the yen under downward pressure. Elsewhere, the South Korean won and Singapore dollar also softened against the dollar.

Meanwhile, the Australian dollar outperformed, jumping 0.8% to a 15-month high. Strong domestic jobs data showed employment rose by 65,200 in December, with the unemployment rate falling to 4.1%. This robust labor market performance reinforced market expectations that the Reserve Bank of Australia could raise interest rates as soon as its February meeting.