Asian currencies: South Korean won, Indonesian rupiah slip

JAKARTA: Among currencies, the South Korean won and the Indonesian rupiah slipped around 0.3% and 0.2%, respectively, while the Philippine peso rose 0.2%.

The rupiah’s fall to a two-week low of 16,295 per dollar prompted the central bank to intervene in the foreign exchange market. Late last month, the currency had depreciated to its weakest since April 2020 before recovering over the past three weeks.

Taiwan stocks languished near a six-week low on Friday as investors there joined the global tech rout on worries of stretched valuations, while other regional equities trended higher recovering from the previous session’s losses.

TSMC, the world’s largest contract chipmaker and major Apple supplier, tumbled 5.6% in its worst session since mid-April, dragging Taiwan’s benchmark 3.3% lower. The benchmark was set to log a second straight weekly loss, falling 3.3%.

The Taiwanese market was shut for the last two days due to Typhoon Gaemi.

MSCI’s gauge of Asian emerging market equities was down 0.4% at its lowest level since mid-June. TSMC makes up just over 12% of the index. A broader index of Asian shares extended its 1.9% drop from the previous day.

Both indexes were also headed for a second successive weekly loss.

Investors have been fleeing out of global tech stocks over concerns about escalations in US-China trade tensions, implications of a Donald Trump presidency, lacklustre megacap earnings and valuation concerns.

However, some analysts say the decline is also a course correction after the rally through to June when markets touched record highs.

“Some technology valuations are a bit stretched and we are seeing some sort of correction on that front,” Michael Wan, senior currency analyst at MUFG said.

“Taiwan and South Korea should benefit from a fundamental perspective from greater improvement in electronic exports, notwithstanding the stretched equity valuations we see right now,” Wan added.

Investors now await US personal consumption expenditure data - the Federal Reserve’s preferred measure of inflation - due later in the day.

The Fed meets next week and CME’s FedWatch tool currently shows a 100% chance it will begin easing interest rates in September.

Elsewhere, shares in Jakarta rose 0.5%, while those in Manila advanced 0.6% after resuming trade following a two-day break because of the typhoon. South Korean shares recovered from their six-week low, advancing 0.8%.

In Singapore, stocks and the dollar were largely unchanged after the monetary authority kept its policy settings unchanged as it expects the economy to strengthen over the rest of 2024. Most regional equities were headed for weekly losses, with South Korean shares set to decline for the third consecutive week.