Most Asian currencies weakened on Tuesday against the dollar, which tracked US Treasury yields higher amid worries about persistent price pressures, although the Philippine peso inched up after the country’s inflation hit a three-year high.

The Philippine peso bucked the broader trend to climb 0.1%, on track for its best day in nearly two weeks, after the country’s inflation in May accelerated at its fastest pace since November 2018, supporting views of a further rate hike.

“The central bank of Philippines, Bangko Sentral ng Pilipinas (BSP), began its rate hike cycle in May to quell inflation,” analysts at ING wrote in a note. “Given the view for inflation we expect additional tightening from the BSP in the coming months.”

On the contrary, the South Korean won tumbled 1.1% against the dollar to hit a near two-week low and led losses among the Asian currencies. The Thai baht and Taiwan dollar fell 0.4% each.

The US 10-year treasury yields climbed to 3.05% for the first time in nearly four weeks ahead of consumer price data on Friday, which is expected to show still high inflation.

“Ahead of the upcoming data and the Federal Reserve meetings, US treasury yields are likely to remain heavy, so a push up to the old highs of 3.2% cannot be ruled out in coming days,” Westpac analysts wrote in a note.

“We see the multi-week price action as a broad range trade as the market awaits the impact of upcoming 50 basis points rate hikes from the Fed,” they added.

Asian stocks fall; Thai baht dips as key rates likely to be on hold

Stocks were mixed in Asia as overnight jitters on Wall Street offset the boost to confidence from the improving COVID-19 situation in China and the potential easing of regulatory constraints on Chinese tech companies.

South Korean stocks fell 1.5% to its worst day since May 24 while Malaysia’s lost as much as 0.6% to hit its lowest since Feb. 7.

Conversely, equities in Indonesia and Philippines rose 0.4% and 0.2%, respectively.

Meanwhile, elevated prices of oil are also putting pressure on Asian markets, many of which are net importers of the commodity. An anticipated recovery in Chinese demand and doubts over OPEC+ producers’ decision to increase output have continued to push oil prices higher.

Highlights:

** Indonesian 10-year benchmark yields rise 5 basis points to 7.046%.

** Singapore 10-year benchmark yields rise 47 basis points to 2.887%.

** India’s palm oil exports in May were their highest in seven months and up 15% on April as the country overcame curbs on Indonesian exports.