Asia FX: Yen-led winners and export backdrop – MUFG
Michael Wan at MUFG explains that South Korean Won (KRW), Thai Baht (THB), Singapore Dollar (SGD) and, to a smaller extent, Philippine Peso (PHP) are the main Asian FX beneficiaries if Japanese Yen strength persists, given their higher sensitivity to USD/JPY.
If the Japanese Yen continues to strengthen, South Korean Won (KRW), Thai Baht (THB), Singapore Dollar (SGD), and to a lesser extent, Philippine Peso (PHP) are expected to gain favor in the Asia FX market, according to Michael Wan at MUFG. This is primarily due to these currencies' heightened sensitivity to USD/JPY movements. Conversely, Chinese Yuan (CNH), Taiwan Dollar (TWD), and Indian Rupee (INR) have shown a decline in correlation and conditional beta to Yen fluctuations since 2025.
Robust Asia PMI data indicates strong export momentum, with growth projected to decelerate into 2027 but maintain a high level. The latest Asia PMI numbers suggest that export momentum remains robust, supporting the expectation of continued growth despite some slowdown.
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