SINGAPORE: Most emerging Asian currencies are set to suffer weekly losses as investors shunned risk assets on worries about slowing global growth and the South Korean won hit a two-month low on Friday.

Growth concerns prompted investors to reduce long positions in some regional units against the yen, which they built up after the Bank of Japan's surprising policy easing in February.

Emerging Asian currencies are expected to soften next week, especially if markets see further signs of economic slowdown in China.

Some investors have started hedging against the possibility  of a China hard landing by selling the Australian dollar.

But dealers and analysts say that so far, most investors do not expect a severe slowdown in the world's second-largest economy enough. As a result, emerging Asian currencies “have not priced in a China's hard landing scenario yet,” said Saktiandi Supaat, head of FX Research at Maybank in Singapore.

However, any further signs of a sluggish China economy will put more pressure on regional units, he added.

On Thursday, a private survey showed that China's manufacturing sector activity shrank in March for a fifth consecutive session. Adding to global economic worries, German and French manufacturing also suffered surprisingly sharp declines.

Among emerging Asian currencies, the Indian rupee has had its worst week against the dollar since late November,  losing 2.0 percent against the dollar through Thursday, according to Thomson Reuters data. Indian markets were closed Friday for a holiday.

The rupee, still the best performing emerging Asian currency so far this year, came under further pressure from worries about fund outflows and dollar demand from oil importers.

On Friday, the won hit a two month low on dollar demand linked to local companies' dividend payments to foreign shareholders.

A South Korean tobacco maker KT&G is scheduled to pay dividends on the day with foreign investors estimated to receive 264.1 billion won ($233.82 million), according to Reuters calculations.

Other emerging Asian currencies found support from China's strong yuan fix. Earlier, the People's Bank of China fixed the yuan's mid-point at 6.2891 per dollar, the strongest since 2005 revaluation.

But investors hesitated to chase the regional currencies as China is seen as widening the yuan's trading band.

“We believe that the strong fixing does not reflect a new desire for appreciation but rather is a way to show higher two-way volatility,” Dariusz Kowalczyk, senior economist and strategist for Asia ex-Japan at Credit Agricole CIB, said in a note.

“It will remain two-way, meaning that we will soon see days of a weaker fixing.”