The global lender also cited the risks of a sharper-than-expected slowdown in China and a possible "No Deal" Brexit, saying these could worsen volatility in financial markets. China, the world's second-largest economy, grew 6.4 percent in the fourth quarter from a year earlier, the slowest pace since the depths of the global financial crisis, data showed on Monday. Full-year growth of 6.6 percent was the weakest in nearly three decades, and activity is expected to cool further in coming months.
"In forex markets, the dollar was mixed but noticeably stronger against Asian currencies pressured by softer Chinese GDP," said Mizuho Bank in a note on Tuesday. Mizuho believes policymakers in major economies are expecting risks to increase, but will likely maintain their view that the chance of a recession this year is low.
The Malaysian ringgit was the top decliner, weakening as much as 0.5 percent ahead of inflation data scheduled for Thursday. Malaysia's consumer price index (CPI) was expected to rise 0.4 percent in December from a year earlier, a Reuters poll showed, slightly faster than the previous month. The Malaysian currency market was closed for a holiday on Monday when the China GDP data was released.
The Philippine peso declined as much as 0.3 percent to 52.900 against the dollar, its weakest level since Dec. 27, 2018. China's yuan weakened to a near two-week low against the US dollar, breaching the closely-watched 6.8 mark. The Thai baht, the Indian rupee and the Singapore dollar also weakened slightly.
The Indonesian rupiah bucked the trend, strengthening as much as 0.2 percent after declining up to 0.4 percent in the previous session. The Korean won declined up to 0.3 percent to 1,130.90 against the dollar, its weakest level since Dec. 20, 2018.
South Korea's GDP growth slowed to a six-year low, hurt by weakening exports, underlining a dimming outlook in the face of a slowdown in key trade partner China. Tuesday's Bank of Korea GDP report showed growth of 1 percent in the fourth quarter, the fastest in three quarters as the economy rode a spurt in government stimulus.
Seoul increased spending by 3.1 percent on-quarter, the biggest rise in almost nine years and helped boost construction and capital investment. The Taiwan dollar weakened slightly despite data showed that its December export orders fell 10.5 percent, far worse than the 3.2 percent decline forecast in the Reuters poll. The island's exports had fallen 2.1 percent in November.