The Chinese yuan hit its highest level in a month and a half against the dollar on Friday and seems poised for its best weekly performance since July, supported by US President Donald Trump's suggestion that tariffs on China could be avoided. On Friday, the onshore yuan hit a high of 7.2450 to the dollar, the highest level since December 11, before trading at 7.2474 per dollar at 03:00 GMT. Its offshore counterpart followed the strengthening trend and reached a one-and-a-half month high at 7.2519 before trading at 7.2535 at 03:00 GMT

The yen strengthened and Japanese government bond yields hit new multi-year highs on Friday, after the Bank of Japan raised interest rates as expected and raised its inflation forecasts. The yen strengthened 0.5 percent to 155.32 per dollar, after oscillating between slight gains and losses immediately after the decision, which came shortly after the mid-day break in the stock market ended. The yen was supported by comments from US President Donald Trump that he believed he could reach a trade deal with China and avoid new tariffs.

The Indian rupee rose on Friday, following the rise of the Chinese yuan in its Asian peers, after US President Donald Trump said a trade deal with the country was in sight, while expectations of volatility fell due to relief at the absence of tariffs immediate American customs on China.