The US Federal Reserve's 12th quarter-point rate rise since June last year and promises of more tightening, along with the view that European rates will rise next year, undermined the yen pushing it to a 2-year low of 116.87 per dollar.
The peso rose to 54.7150 per dollar, its strongest level since early June, with traders citing strong dollar sales by banks betting that remittances from overseas Filipinos will surge in the weeks ahead.
"We fear the markets are overselling the dollar. If we see a huge chunk of imports, we'll be back at 55.20 in a short time," one Manila-based trader said.
"Banks are anticipating heavy remittances and many of them are playing it on the short side," he added, referring to traders building up short dollar, long peso positions.
Elsewhere, the Korean won and the Indian rupee were among the few currencies that weakened marginally.
The won edged down to around 1,044 a dollar after South Korean central bank and finance ministry officials spoke about likely intervention and highlighted the won's rise against the yen.
The won's relative outperformance drove the yen-won cross rate to a 7-year high near 8.90 won per yen on Wednesday, before the remarks pushed the won down to 8.93.
The region's outperformance of the yen has been seen over the past two weeks.
The yen has shed 1.3 percent against the dollar in the past two weeks, while the won has appreciated a percent, the Indonesian rupiah has gained 0.6 percent and the Taiwan dollar has risen about a quarter of a percent.
"The yen continues to underperform," said Claudio Piron, a currency strategist with J.P. Morgan, adding that yield differentials were one important factor driving trade. "But EMBI spreads are still very tight despite the Fed raising rates," he said referring to J.P. Morgan's emerging market bond spreads.
"It seems as if the market has matured in terms of the Fed tightening cycle and in terms of local policy to the extent that Indonesia's fiscal fuel subsidy cuts are not necessarily inflationary but seen as a one-off price adjustment," Piron said.
Data released on Tuesday showed Indonesia's annual inflation rate in October surged to 17.9 percent, the highest since June 1999, following an average 126 percent rise in domestic fuel prices last month.
The rupiah initially fell after the figures to a 2-week low but soon recovered after Bank Indonesia raised rates by 1.25 percentage points to 12.25 percent. Indonesia's markets are closed for the rest of the week and re-open on Monday.