Chinese yuan surged to a 34-month high of 6.834 against the dollar, driven by expectations of policy support ahead of China’s National People’s Congress. Investors anticipate fiscal stimulus and growth targets to shape Beijing’s economic priorities, though broader regional currencies remained subdued due to U.S. tariff uncertainties. The Japanese yen weakened 0.4% as Bank of Japan Governor Kazuo Ueda signaled openness to rate hikes if inflation and wage trends hold, though dovish appointees to the BOJ board introduced cautious speculation.

U.S. President Donald Trump’s 10% global tariffs, with plans to raise them to 15%, weighed on Asian markets. The South Korean won stalled after the Bank of Korea maintained rates at 2.5%, while the Singapore dollar dipped 0.1% and the Indian rupee edged up 0.1%. The Australian dollar gained 0.2%, reflecting mixed regional sentiment.

BOJ’s potential rate hike path remains uncertain, with analysts noting conflicting signals from officials. ING analysts highlighted that wage growth above 5% and April inflation data could push hikes to June, despite Takaichi’s cautious tone. The yen’s volatility underscores market division over monetary policy direction amid global economic headwinds.

Key takeaway: Currency movements reflect divergent central bank strategies—China’s proactive stimulus bets versus Japan’s data-dependent easing. U.S. trade policy remains a wildcard, amplifying risks for dollar-linked assets across Asia.