[TOKYO] The dollar strengthened against almost all of its Asian peers Friday as investors await fresh US data expected to lift the likelihood of a hike in key US interest rates.
Emerging currencies broadly dropped against the dollar, with Indonesia's rupiah and Malaysia's ringgit losing more than one per cent.
The greenback was also up to 119.12 yen from 118.88 yen Thursday in New York, as Japanese equities rallied thanks to the weaker yen, which boosted investor confidence.
Global markets have enjoyed a broadly strong month so far after suffering their worst quarter since 2011 during July-September, when trillions were wiped of valuations.
The main story behind the latest rally has been the likelihood the Fed will have to put off a rate hike until next year owing to a slowdown in world economic growth.
After saying in early 2015 that a rise was expected as the US economy picked up pace, bank policymakers have gradually lowered their expectations, with turmoil unleashed by China's yuan depreciation in August playing a major role.
A recent run of weak data out of Washington - including below par jobs growth and retail sales - have also muddied the Federal Reserve's waters, but analysts now say the release of US data on industrial production and consumer sentiment could increase the prospects of the first US rate rise since 2006.
Sam Tuck, a senior currency strategist at ANZ Bank New Zealand, told Bloomberg News he thought the dollar would be supported by the fresh US economic data.
"Broadly speaking, the employment situation is strong enough (for an interest rate rise) and it's down to the activity outlook," he said.
The rupiah fell 1.31 per cent on Friday, while the ringgit lost 1.55 per cent.
The rupiah is up more than seven percent this month, while the ringgit has gained around 5 per cent. The Korean won was 0.31 per cent higher, while the Thai baht and the Singapore dollar both eased 0.39 per cent. Other Asian emerging currencies also weakened.
The euro was at US$1.1378 compared with US$1.1376 in US trade and well down from US$1.1480 earlier Thursday in Asia after a European Central Bank board member said eurozone inflation was undershooting its target.
The comments led the speculation the ECB will widen its already huge stimulus programme.