Kuala Lumpur, 19 September 2025 — Emerging Asian currencies weakened on Friday amid a return of strength in the U.S. dollar and rising U.S. Treasury yields, while stock markets across the region retreated after recent gains. Investors appeared to be re-evaluating risk as signals from the U.S. Federal Reserve suggested that further monetary easing may be more gradual than hoped.
The MSCI Emerging Asia equities index fell about 0.6%, weighed down by losses in major markets that had recently hit record highs. Singapore’s Straits Times Index drifted lower for the sixth session in a row, after peaking earlier in the month. Taiwan and South Korea also saw equities slip from their highs.
Currencies bore the brunt of dollar strength. Several regional currencies, including the Korean won and Indonesian rupiah, fell in the session, pressured by concerns that U.S. monetary policy may remain tighter for longer. The Indian rupee in particular was seen struggling, nearing previous lows as dollar demand increased.
Even though many regional equity benchmarks are still set for weekly gains, the slide in currencies and the dip in stock indexes reflect a more cautious investor mood heading into next week. The focus now shifts to upcoming U.S. data and any further cues from the Fed that might clarify the pace of future rate changes.
