Asia FX: Export strength supports currencies – MUFG

MUFG’s Senior Currency Analyst Michael Wan argues that stronger Asia exports in early 2026 are a key support for regional currencies, even as new US tariff investigations under the Trump administration create uncertainty. The bank notes robust export data from Thailand and South Korea and expects Asia’s exports to accelerate in 1H2026, favouring export-oriented currencies over INR and IDR.

Exports offset tariff policy uncertainty

"In particular, the Trump administration plans to use Section 232 legislation to launch investigations into a range of products such as batteries, cast iron and iron fittings, electric grid equipment, telecom equipment, plastics and plastic pipings and industrial chemicals."

"This comes on top of the usage of Section 301 investigations to counter discriminatory actions by trading partners, and we think overall fits in with our view that the administration is trying to recreate the previous tariff regime to the extent possible even as existing trade authorities are more cumbersome."

"Beyond tariffs, the key for Asia is the pickup in exports for early months of 2026 we have seen so far, including a 25%yoy rise in Thailand’s exports coupled with a 47%yoy surge in South Korea’s exports for the first 20 days of February on a working adjusted basis."

"These trends fit in well with the lead indicators we track including industrial metal prices, which suggest that if anything Asia’s exports should accelerate into at least 1H2026 including from strong AI and electronics demand."

"We as such still like the export-oriented currencies such as KRW, MYR, and to some extent CNY, while think INR and IDR will likely underperform moving forward still."

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