Asian Currencies Face Repricing Risk Amid Policymaker Pushback

Asian currencies are facing a repricing risk as policymakers around the world resist competitive depreciation. According to DBS Group Research economist Philip Wee, this is evident in US support for Japanese Yen stabilization.

Wee notes that the US Treasury's Scott Bessent confirmed Washington's backing of Japan's efforts to stabilize the JPY from four-decade lows was intended to prevent a wave of Asian currency depreciation.

The European Union also wants to press China over the Chinese Yuan's undervaluation, which is part of wider concerns about trade imbalances. This development reinforces the case for investors to pay closer attention to Asian currency appreciation than depreciation risks.