Asia FX: Constructive stance on North Asia currencies – BNY

BNY’s Head of Markets Macro Strategy Bob Savage sees supportive fundamentals for Asia FX, citing accommodative monetary policy, fiscal expansion and AI- and semiconductor-led export growth. The bank maintains a constructive view on CNY, TWD, KRW and MYR, neutral on SGD and IDR, and cautious on INR, THB and PHP, while warning that higher Oil could weigh on net importers like THB, KRW, INR and JPY.

Policy divergence and exports drive Asia FX

"In Japan, the Tokyo CPI for February, together with January PPI, retail sales and industrial production, will test the durability of price pressures and likely keep JPY volatility elevated. Weekly portfolio flow data will also be closely monitored, given strong recent foreign inflows into Japanese equities and bonds."

"India’s Q4 GDP and January fiscal deficit data will shape INR performance and bond supply expectations."

"Regional fundamentals remain supportive, underpinned by accommodative monetary policy, proactive fiscal expansion, and an additional boost from AI- and semiconductor-led growth momentum."

"We maintain a constructive stance on CNY, TWD, KRW and MYR, a neutral stance on SGD and IDR, and a cautious stance on INR, THB and PHP."

"Sustained and elevated crude prices would weigh on net oil importers via the trade balance channel, particularly THB, KRW, INR and JPY, in the near term. However, this is unlikely to alter the broader inflation trajectory at this stage materially."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)