BENGALURU: South Korea’s won recouped early losses on Tuesday and stocks rose to a record high, as the country showed its commitment to implementing a trade deal with the United States following fresh tariff threats.
South Korea scrambled to provide the US reassurance on the trade deal signed last year, after US President Donald Trump threatened to raise tariffs on autos and other imports to 25 percent from 15 percent, blaming a delay in enacting the pact agreed last year.
The won was largely flat at 1,444.9 per dollar after falling 0.6 percent earlier in the session. The benchmark KOSPI index was up 2.7 percent after a 1.2 percent fall earlier.
Nomura economist Jeong Woo Park said in a note that their base case scenario is that the issue is resolved quickly and tariffs are normalised within the next month.
“We expect policy uncertainty to rise in coming days, although we believe its impact on growth should be marginal. Higher tariffs can negatively affect non-tech exports such as autos and pharmaceuticals, but it should not have an impact on chip exports, which are currently the key driver of South Korea’s exports,” he said.
In Indonesia, the rupiah recovered from early losses to trade flat at 16,770 per dollar. The country’s parliament approved President Prabowo Subianto’s nephew as a new central bank deputy governor, sparking investor concerns about the independence of Bank Indonesia.
Last week, worries over his nomination, coupled with concerns over Indonesia’s fiscal health, had brought the rupiah to a record low of 16,985.
The currency recovered some losses after Bank Indonesia held rates steady and provided currency-stabilisation assurances.
Among other regional currencies, the baht edged 0.2 percent higher after the finance ministry said it expected the economy to grow 2 percent this year, keeping its previous forecast.
Malaysia’s ringgit rose 0.3 percent against the US dollar, which traded near four-month lows ahead of a Federal Reserve meeting and possible announcement of a new Fed chairman.
The dollar has been under pressure due to a range of factors, including Washington’s desire for a weaker currency, looming US government shutdown and Trump’s erratic policymaking.
Meanwhile, the Japanese yen held firm on talks of rate checks from the United States and Japan, a move often seen as a precursor to intervention.
Stock markets in the region tracked global shares higher. MSCI’s gauge of Asian emerging market equities rose 1.4 percent to an all-time high.
Taiwan stocks notched a record closing high amid chip-sector optimism. Singapore stocks rose more than 1 percent to log a fresh high.
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