BENGALURU: Jakarta stocks edged higher and the rupiah held steady on Wednesday after Bank Indonesia (BI) cut its benchmark rate, even as broader Asian equity markets remained subdued as investors tempered their expectations of US Federal Reserve rate cuts.
The rupiah, which was down 0.1% before the decision, remained more or less unchanged while equities gained, last trading 0.8% higher.
BI made a 25-basis-point cut in a move to support an economy facing rising pressure from an uncertain global trade environment and a slowdown in domestic demand.
Market participants had already priced in rate cut expectations after Indonesia struck a tariff deal with Washington. The deal puts duties at 19% on goods imported from Indonesia — well below the previously threatened 32%.
“Policymakers have been opportunistic this year, prudently tapping periods of market stability to lower rates, with the latest move also coming against the backdrop of a trade deal with the US,” Radhika Rao, a senior economist with DBS, said after the decision.
Other emerging market stocks fell, with the exception of Singapore and Taiwan. Stocks in Singapore rose 0.3% to end at a fresh record.
Equities in Manila dragged as much as 2.3%, while Malaysian and South Korean benchmarks fell 0.9% each. Thailand stocks reversed early gains to trade 0.3% lower.
Taiwan stocks surged to their highest since late February, rising 1.2%. The benchmark index in Taipei erased its losses since the beginning of 2025 in what has been a volatile year for Taiwanese assets. The local dollar was trading 0.4% lower. The surge came after the tech-heavy Nasdaq closed at a fresh record, led by AI chip-major Nvidia’s 4% gain. Taiwanese semiconductor player TSMC gained 1.8%.
Long considered a subdued player in emerging Asian currency markets, the Taiwan dollar’s historic rally in early May drew fresh attention, underscoring a broader reappraisal of the region’s economic outlook as the island’s pivotal role in global semiconductor and AI supply chains grows increasingly vital.
Comments
Comments are closed for this article.