Mixed Movements in Asia: Won Surges, While Rupiah Falters
Asian currencies moved diversely against the US Dollar in trading on Tuesday (2 2/09/2026).
According to Refinitiv data, as of 09:38 WIB, six out of ten Asian currencies managed to strengthen against the greenback, while two currencies weakened and the remaining two remained stagnant.
The South Korean Won recorded the sharpest appreciation in Asia this morning, surging 1.01% to a position of KRW 1,360.76/US$. The Taiwan Dollar followed with a 0.09% gain, while the Philippine Peso rose by 0.07%, followed by the Singapore Dollar which strengthened by 0.05%. The Vietnamese Dong and Malaysian Ringgit both saw slight gains of 0.02%, whereas the Chinese Yuan and Thai Baht remained stagnant against the US Dollar.
On the other hand, the Rupiah experienced the deepest pressure in Asia this morning. The Indonesian currency weakened by 0.34% to a position of Rp17,885/US$.
The Japanese Yen also remained in the red, declining by 0.06%. This depreciation of the Yen occurred amidst a holiday in the Japanese market, resulting in more limited movement, though it remains shadowed by the risk of intervention from Japanese authorities.
Currency movements in Asia this morning continue to be heavily influenced by external factors, particularly the dynamics of the US Dollar in the global market. At the same time, the US Dollar Index (DXY) was observed to have weakened slightly by 0.03% to 100.395, reversing from a 0.21% gain at the close of Monday’s trading.
This condition indicates that the US Dollar remains relatively strong after receiving a boost last week from the Federal Reserve’s interest rate hike and signals that further tightening remains on the table.
As reported by Reuters, the Yen remains one of the market’s primary focuses. The Japanese currency is under pressure as market participants assess that the Bank of Japan (BOJ) is still struggling to match the hawkish stance of other global central banks. Although the BOJ raised interest rates to a 31-year high last Friday, the decision was not strong enough to lift the Yen, as there were two dissenting dovish votes and no definitive guidance regarding the next rate hike.
This situation contrasts with the Federal Reserve, which also raised rates last week and signalled that additional hikes are possible. This divergence in direction ensures that the interest rate differential between the US and Japan remains wide.
“If the BOJ does not tighten policy faster than the Fed, the US-Japan interest rate differential of approximately 275 basis points will continue to support yen-based carry trades,” said Carlos Casanova, senior Asia economist at Union Bancaire Privée, as quoted by Reuters.
The market currently estimates a 30% probability that the BOJ will raise short-term interest rates to 1.5% in October. Meanwhile, the probability of the Fed raising interest rates by 25 basis points at its next meeting is estimated at around 55%. These expectations continue to support the US Dollar, even though the DXY weakened slightly this morning. Pressure on the Yen has not fully subsided as the yield differential remains more favourable for the US Dollar.