SINGAPORE: Most emerging Asian currencies fell on Wednesday, taking their cue from the yen’s slide after the Bank of Japan overhauled its policy framework and adopted a target for long-term interest rates.

A rise in bond yields across Asia also dampened sentiment on the regional currencies, with Japanese government bond yields up after the BoJ said it would aim to guide the 10-year bond yield to around zero percent as part of its revamped policy framework.

Still, some traders and analysts said questions remained about what the BoJ’s latest move meant for asset markets, amid doubts over the effectiveness of further easings by global central banks.

“The question on ‘did the BoJ actually ease?’ remains. They didn’t increase bond purchase and didn’t cut rates. I didn’t see any form of outright easing but an attempt to engineer a normal upward sloping yield curve,” said Christopher Wong, a senior FX strategist for Maybank in Singapore.

Beyond the BoJ, the focus remained on whether Fed Chair Janet Yellen would provide clues on the timing of an interest rate hike when the US central bank concludes a two-day policy meeting later in the day.

The Fed is expected to keep interest rates on hold this week but could signal an increased likelihood of a tightening by the end of this year.

Maybank’s Wong said emerging Asian currencies could stay weaker, given expectations of tightening within this year.

“A ball is on the Fed’s court now. Our house view remains for the Fed to hike in December after the presidential election and we still see moderate USD strength into the fourth quarter,” he said. The ringgit lost as much as 0.5 percent to 4.1580 per dollar, its weakest since June 2, tracking the yen’s weakness.

Currency traders hardly budged after data showed Malaysia’s consumer price rose 1.5 percent in August, more than expected.

The Malaysian currency is seen weakening to the previous low of 4.1720 after it faltered through chart support at 4.1500, analysts said.

South Korea’s won gained by as much as 0.9 percent on exporters’ settlements, with data showing the country reported a near $2 billion trade surplus in the first 20 days of this month.

The won found further support as traders unwound some of the bearish bets on expectations the Fed may keep interest rates steady this week.

But the currency pared most of the gains on the yen’s weakness.—Reuters