Fed hike 'certainty' pushes Asian currencies lower with yen down near 160

Asian currencies weakened after Federal Reserve communications were read as signalling near-certain further rate hikes, with the Japanese yen sliding toward the 160 per dollar level. The transmission runs through the interest rate differential: higher expected US policy rates widen the yield gap against Japan, where policy remains comparatively accommodative, prompting capital to flow toward dollar-denominated assets. The yen is the most exposed major currency given its low-yield funding status and its sensitivity to rate differentials, while the dollar gains broadly against regional peers. Traders will watch the next US consumer price index release and any Bank of Japan intervention signals near the 160 threshold, as either could shift expectations for the differential.

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