MUFG reports stronger Asian exports in early 2026, supporting several regional currencies despite uncertainty from new US tariff investigations under the Trump administration. It expects Asia\u2019s exports to accelerate in 1H2026, which may favour export-focused currencies over INR and IDR.<\/p>\n
The report says the US plans to use Section 232 to investigate products including batteries, cast iron and iron fittings, electric grid equipment, telecom equipment, plastics and plastic piping, and industrial chemicals. It also refers to Section 301 investigations aimed at actions seen as discriminatory by trading partners.<\/p>\n
MUFG cites a 25% year-on-year rise in Thailand\u2019s exports and a 47% year-on-year increase in South Korea\u2019s exports for the first 20 days of February, on a working-day adjusted basis. It links these trends to lead indicators such as industrial metal prices and demand tied to AI and electronics.<\/p>\n
The report indicates support for KRW, MYR, and to some extent CNY. It says INR and IDR may underperform.<\/p>\n
Despite new US tariff investigations creating market noise, the key for Asia is the surge in exports we have seen in the early months of 2026. This trend fits well with the lead indicators we track, suggesting Asia\u2019s export growth should accelerate through at least the first half of the year. This strength is creating a clear divergence among regional currencies.<\/p>\n
The data supporting this view is compelling, especially from the electronics sector which is seeing strong demand from the AI boom. South Korea\u2019s final February export numbers confirmed a 41.5% year-over-year jump, driven largely by a more than 60% rise in semiconductor shipments. This aligns with global trends, as the Semiconductor Industry Association noted that global sales in January 2026 were up 20% from the previous year, continuing a growth streak that began back in late 2024.<\/p>\n
This manufacturing strength is also reflected in industrial metal prices, a reliable forward-looking indicator for the global economy. Copper prices on the London Metal Exchange recently pushed past $10,500 per tonne, a two-year high not seen since the recovery period of early 2024. This signals that factories globally are ramping up production, which directly benefits export-oriented Asian economies.<\/p>\n
However, traders must remain cautious of headline risk from the new US administration’s trade policy. The talk of Section 232 and 301 investigations into a range of industrial goods has kept currency volatility elevated, with the VIX index holding near 19, a notable increase from the calmer levels we saw for much of 2025. This means any long positions will likely face periods of sharp, politically driven turbulence.<\/p>\n
Given this backdrop, derivative strategies should favor the export-oriented currencies. We think traders should consider buying call options or establishing long futures positions on the Korean Won (KRW) and Malaysian Ringgit (MYR). These currencies are best positioned to benefit from the powerful electronics and manufacturing upswing.<\/p>\n
At the same time, we would avoid currencies with a greater domestic focus or different trade exposures, like the Indian Rupee (INR) and Indonesian Rupiah (IDR). Recent data showed India\u2019s inflation remains sticky above the central bank\u2019s target, while Indonesia\u2019s trade surplus narrowed in January. A pairs trade, such as long KRW against short INR, could be an effective way to capture this regional divergence.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" MUFG sees early-2026 Asian export strength boosting KRW, MYR and CNY, while US tariff probes threaten INR, IDR.<\/p>\n","protected":false},"author":62,"featured_media":16959,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42724","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/42724","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=42724"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/42724\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16959"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=42724"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=42724"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=42724"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}