Asian currencies remained subdued on Friday as investors stayed cautious ahead of key U.S. inflation data, while a soft Japanese inflation reading clouded the outlook for further Bank of Japan rate hikes. The yen's USD/JPY pair was largely unchanged. Japan's headline inflation fell to 1.5% in January, its lowest in nearly four years, while core inflation slowed to 2%, signaling cooling price pressures.

This weaker inflation print reinforced doubts about the timing of the central bank's next rate increase, despite Japan's economy expanding at its fastest pace in over four years. The softer data complicates the BOJ's policy path, potentially delaying further tightening.