Most Asian currencies slipped on Tuesday as investors weighed conflicting signals over the Middle East conflict, while also watching a rebound in the U.S dollar and weak Japanese inflation data.
The U.S. dollar firmed after sliding in the previous session, with the Dollar Index rising 0.5%.
US Dollar Index Futures also traded 05% higher by 23:20 ET (03:20 GMT).
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Iran denies US talk claims to end conflict The greenback had weakened after U.S. President Donald Trump said Washington had held “very good and productive” talks with Iran and would pause strikes on the country’s energy infrastructure.
However, Iran denied any such negotiations, contradicting U.S. claims and clouding the outlook for de-escalation.
Regional currencies broadly weakened, with the South Korean won's USD/KRW pair jumping 1%.
The Indian rupee's USD/INR pair rose 0.4% to 93.54 rupees, hovering below record highs of 94.12 rupees touched in the previous session.
The Chinese yuan's onshore pair USD/CNY edged 0.2% higher, while the Singapore dollar's USD/SGD gained 0.3%.
The Australian dollar's AUD/USD pair slipped 0.6%.
The Japanese yen's USD/JPY pair edged down 0.1%.
Japan's core inflation slips below BOJ target Data showed Japan’s inflation cooled more than expected, with core price growth falling below the central bank’s target, complicating the policy outlook.
Meanwhile, business activity also lost momentum, with the flash manufacturing PMI easing to 51.4 in March from 53.0, signalling slower factory expansion.
The softer data reinforced expectations that the Bank of Japan may proceed cautiously on further policy tightening.
"Still, the Bank of Japan is likely to look through the recent inflation slowdown and focus on upside price risks," ING analysts said in a note.
"Healthy wage negotiation results and firmer-than-expected PMIs raise the possibility of an April rate hike. Still, the timing could shift, depending on the situation in the Middle East," they added.
