BENGALURU: Asian currencies firmed on Thursday, led by Taiwan’s dollar, as sustained demand for AI-related stocks spurred overseas appetite for the island’s technology shares and lifted South Korean equities, too.
The MSCI index of emerging market currencies edged higher, with Taiwan’s dollar and South Korea’s won leading gains. Indonesia’s rupiah and Malaysia’s ringgit ticked 0.1 percent higher each day.
Taiwan’s dollar advanced as much as 0.6 percent to a more than one month high of 31.991 a dollar, extending gains for a third straight session. For the week, the currency has gained nearly 1 percent so far in its best performance since early September 2025.
“The dividend outflow pressure is starting to abate in Taiwan because we are nearing the end of the dividend payout season in Taiwan. So that could also help,” said Lloyd Chan, FX strategist at MUFG.
Large dividend distributions can weigh on the Taiwan dollar as overseas shareholders convert proceeds into foreign currencies from the local currency.
Historically, the central bank has stepped in to defend the currency whenever USD/TWD nears 32.5, a level that may also tempt exporters to swap some of their dollars for local currency, Chan added.
Following the US Treasury’s effort with Japan to support the yen last month, there has also been speculation that the US Treasury Department may take a more hands-on approach to managing exchange rates. Taiwan is one of 10 trading partners on its currency monitoring list.
Taiwan stocks rose 0.2 percent, supported by advances in heavyweight chipmaker Taiwan Semiconductor Manufacturing Co (TSMC).
TSMC, the world’s largest contract chipmaker and a major supplier to Nvidia and other AI firms, has been among the standout performers in Asia this year, helping propel Taiwan’s benchmark index higher as demand for advanced AI chips remains robust.
Another AI beneficiary, South Korea’s KOSPI, jumped nearly 3 percent to its highest level in almost three weeks, extending a chip-and-tech rally that put the index on track for its first weekly gain of more than 10 percent in eight weeks.
The South Korean won rose 0.3 percent and is up 1.8 percent so far this year. Strength in technology shares spilled over into wider emerging-market equities, pushing the MSCI EM Asia equity index 0.4 percent higher and the MSCI EM Information Technology Index up 0.8 percent.
Malaysia’s economy grew 6 percent in the second quarter, surpassing expectations as stronger export growth and steady household spending offset risks arising from the Middle East conflict. The ringgit edged up 0.1 percent, while the benchmark index slipped 0.3 percent.
Elsewhere, Philippine shares added 0.3 percent, Thailand’s SET index rose 0.5 percent and Singapore stocks edged up 0.1 percent.
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