Emerging Markets: Asian stocks decline due to uncertainty over U.S. tariffs; Asian currencies expected to close higher for the month
Asian stocks fell due to uncertainty over U.S. tariffs, with the MSCI Asia Emerging Markets Index down 0.6%. The Thai stock market saw a decline of 1.1%, hitting a new low in over a month. Nevertheless, Asian currencies showed mixed performance against the U.S. dollar, still expected to achieve monthly gains. The dollar retraced its gains and is projected to decline for the fifth consecutive month. A foreign exchange strategist at Malayan Banking stated that the market's conservative bets on Trump's tariffs have affected investor confidence, prompting a shift towards Asian currencies. The MSCI Emerging Markets Currency Index rose over 2% in May
"Emerging Markets" Asian stocks fall due to uncertainty over U.S. tariffs; Asian currencies expected to close higher for the month
Reuters, May 30 - Asian emerging markets fell on Friday after a U.S. federal court temporarily reinstated tariffs imposed by President Trump, while Asian currencies were mixed against the dollar but still expected to achieve monthly gains.
The MSCI Asia Emerging Markets Index .MIMS00000PUS fell 0.6%.
The Thai stock market .SETI dropped as much as 1.1%, hitting a new low in over a month, while the Philippine stock market .PSI fell 0.7%. The South Korean stock market .KS11 declined nearly 1%.
A U.S. federal appeals court reinstated President Trump's most comprehensive tariffs on Thursday. The day before, a trade court ruled that Trump's tariffs were beyond his authority and ordered an immediate halt to their collection. nL6S3S10V9
Fiona Lim, a senior foreign exchange strategist at Malayan Banking, stated that the world still faces the reality of potential tariffs, and the market is making more conservative bets, believing that most of Trump's tariffs will remain in place.
As a result, the dollar retraced earlier gains and remained subdued on Friday, likely to decline for the fifth consecutive month. FRX/
Regional currency movements varied. The Thai baht THB=TH and the South Korean won KRW=KFTC fell 0.3% and 0.4%, respectively. The Malaysian ringgit MYR= and the Philippine peso PHP= rose 0.1% each.
The reversal of Trump's tariffs and growing concerns about the health of the U.S. economy have weakened confidence in U.S. assets, prompting investors to steer away from the dollar this month in favor of Asian currencies.
The MSCI Emerging Markets Currency Index .MIEM00000CUS rose over 2% in May, marking its best monthly performance since November 2023.
The Thai baht rose 2.3% in May, marking its largest monthly gain since September 2024, while the Singapore dollar SGD= is expected to rise for the fifth consecutive month.
The won also surged nearly 4% this month, with South Korean officials confirming that foreign exchange policy was discussed in recent talks with U.S. officials, intensifying speculation about joint forex measures between South Korea and the U.S.
The Taiwan dollar TWD=TP did not trade on Friday due to a public holiday in Taiwan but recorded a 6.5% monthly gain, setting a historical record for monthly performance.
| Asian stock and currency markets as of 05:10:00 GMT | ||||||
| Country/Region | Currency Code | Daily Change | Year-to-Date Change | Index Code | Daily Change | Year-to-Date Change |
| Japan | Yen JPY= | +0.18% | +9.21% | Nikkei Index .N225 | -1.13% | -4.75% |
| China | Renminbi CNY=CFXS | -0.03% | +1.55% | Shanghai Composite Index .SSEC | -0.32% | +0.03% |
| India | Rupee INR=IN | +0.16% | +0.29% | NSE Index.NSEI | -0.33% | +4.68% |
| Indonesia | Rupiah IDR= | 0.0% | -1.20% | Jakarta Composite Index.JKSE | -0.32% | +1.35% |
| Malaysia | Ringgit MYR= | 0.0% | +5.38% | Kuala Lumpur Composite Index.KLSE | -0.09% | -7.59% |
| Philippines | Peso PHP= | +0.07% | +4.45% | Philippine Composite Index.PSI | -0.96% | -1.53% |
| South Korea | Won KRW=KFTC | -0.57% | +6.77% | Composite Index.KS11 | -0.82% | +12.20% |
| Singapore | Dollar SGD= | -0.19% | +5.88% | Straits Times Index.STI | -0.29% | +3.11% |
| Taiwan | Dollar TWD=TP | -0.06% | +9.53% | Weighted Index.TWII | -0.05% | -7.33% |
| Thailand | Baht THB=TH | -0.28% | +4.99% | Composite Index.SETI | -0.51% | -17.30% |
