BENGALURU, 25 August 2025 – Asian markets started the week on a strong footing, with regional currencies and equities gaining momentum following dovish signals from Federal Reserve Chair Jerome Powell at the Jackson Hole symposium. The Malaysian ringgit and Indonesian rupiah were the top performers, riding a renewed wave of investor optimism.
The ringgit surged 0.6% against the US dollar to 4.20, marking its sharpest intraday rise in three weeks. The rupiah also strengthened 0.5%, hitting a one-week high. Other regional currencies joined the uptrend, with the Taiwan dollar rising 0.6% and the Indian rupee edging up 0.2%. In contrast, the South Korean won, Singapore dollar and Thai baht slipped by 0.1%.
Equities across Asia mirrored the bullish sentiment. Taiwan’s benchmark index climbed 2.5% to a one-week peak, leading regional gains. Markets in Jakarta and Seoul advanced by more than 1% each, while Bangkok’s main index added 0.7%. The upbeat mood was further supported by a rally in technology stocks after reports that US chipmaker Nvidia would halt production of its China-targeted H20 AI chips, a move that is expected to benefit semiconductor players in Taiwan and South Korea.
Powell’s remarks on growing vulnerabilities in the labour market have reinforced market expectations for monetary easing. Investors are now pricing in a 25-basis-point cut at the Fed’s September 16–17 meeting, with nearly 50 basis points of rate reductions anticipated by year-end. The US dollar index, which tracks the greenback against six major peers, was little changed but remained near Friday’s trough of 101.74, its weakest level since late July.
Analysts noted that the current environment favours high-yielding regional currencies. Ray Sharma-Ong, Southeast Asia multi-asset chief at Aberdeen Investments, said that as the Fed moves to lower rates while Asian central banks stay on hold, yield spreads remain attractive, particularly for the Indian rupee and similar assets.
Attention this week is shifting to monetary policy decisions in the Philippines and South Korea. Bangko Sentral ng Pilipinas is widely expected to deliver a 25-basis-point rate cut on Thursday, while the Bank of Korea is forecast to keep its benchmark rate unchanged. Last week, Bank Indonesia surprised markets by trimming its policy rate by 25 basis points and signalling further easing ahead.
Nomura analysts highlighted that the Fed’s shift may open the door for more accommodative policies in emerging Asia. “In Asia ex-Japan, we see better risk-reward in the laggard ASEAN-4 markets tactically, where Fed rate cuts could encourage central banks to pursue growth-supportive rate cuts,” they said, referring to Indonesia, Malaysia, the Philippines and Thailand.
The optimism also spilled into broader emerging markets, with the MSCI Emerging Market Currency Index gaining 0.3% and an index tracking emerging Asian equities jumping as much as 2% to its highest level since September 2021.
