Emerging Asian currencies up

Emerging Asian currencies edged up on Wednesday as the dollar slipped against the yen on concerns about rising tensions between the United States and North Korea and investors trimmed greenback positions ahead of Federal Reserve minutes. North Korea said its newly developed intercontinental ballistic missile can carry a large nuclear warhead, triggering a call by Washington for global action to hold it accountable for pursuing nuclear weapons.
The Pentagon condemned the missile test and said it was prepared to defend the United States and its allies against the growing threat from North Korea. "The greenback is a little softer in early trade but background nervousness, especially on the geopolitical front, may temper near-term Asian FX resilience," said Emmanuel Ng, FX strategist at Oversea-Chinese Banking Corporation.
The dollar shed 0.3 percent in early trade to fetch 112.95 yen, slipping further from Monday's 1-1/2-month high of 113.48. Investors awaited minutes of the Fed's June meeting, to be released later in the day, to gauge how committed it was to hiking rates gain this year and any detail on plans to wind back its massive balance sheet. "The fast money is maybe just lightening up on the US dollar ahead of the (Fed) minutes," Ng said.
Markets imply around a 60 percent chance of another rate rise in December, and a much shallower path of future increases than most Fed members. Among Asian currencies, the Chinese yuan inched up 0.1 percent in early trade, snapping two consecutive days of declines, while the Singapore dollar rose as much as 0.2 percent. The Philippine peso gained for a second straight day on Wednesday, edging up 0.1 percent.
Annual inflation eased for a second straight month in June to 2.8 percent, within the central bank's forecast, due to slower price increases in food and transport, data from the statistics agency showed earlier on Wednesday. The new Philippine central bank chief said the lower inflation reading in June provides the bank some space for fine-tuning its monetary policy.
On June 22, policymakers left key interest rates unchanged and cut their forecast for inflation this year to 3.1 percent from 3.4 percent, still within the central bank's 2-4 percent target range. South Korea's won climbed 0.2 percent on Wednesday, heading for its first session of gains in four. The Korea Composite Stock Price Index (KOSPI) was up 0.1 percent at 2,382.68 points, after faltering late on Tuesday and closing in negative territory.
The won slumped to more than 16-week lows in the previous session following simmering tensions on the Korean peninsula. South Korea's defence minister said on Wednesday he sees a high possibility of North Korea conducting a sixth nuclear test.