BENGALURU- Most Asian currencies were on the defensive on trade war uncertainties while regional stock markets were mixed.
MSCI’s index of international emerging markets equities fell 0.6 percent.
Manila equities dropped 0.9 percent and Taipei stocks fell 0.8 percent.
Kuala Lumpur stocks rose 0.3 percent, but were set for their fourth straight weekly drop. Stocks in Bangkok rose 0.3 percent and were on track for their first weekly gain in eight weeks.
Jakarta stocks slipped 1.6 percent after a short-lived rebound from Tuesday’s sell-off, which triggered a trading halt. The benchmark stock index is down more than 11 percent for the year so far, making it among the worst performers in Asia.
The US dollar rebounded from five-month lows after the US Federal Reserve indicated there was no rush to cut interest rates.
Meanwhile, market anxiety heightened over President Donald Trump’s trade tariffs and the potential economic risks, prompting risk-averse investors to seek safe-haven assets, with gold close to record highs.
Asian currencies weakened, with the Thai baht and the Philippine peso dropping 0.3 percent and 0.2 percent, respectively.
While the direct economic impact from the tariffs will take time to filter through, ANZ analysts said the indirect effect, via the impact on confidence, was already apparent.
“The upcoming tariff announcement by the US government on April 2 could be the catalyst for further investor selling if it is more aggressive than expected. The continuation of outflows will weigh on the region’s asset prices and currencies, which could limit the extent of monetary policy easing.”
