Emerging Asian equity markets fell on Friday after a US federal appeals court temporarily reinstated sweeping tariffs imposed by former President Donald Trump. The decision came just a day after a US trade court blocked the duties, ruling Trump had overstepped his authority.
The reinstated tariffs have reignited market caution, with investors anticipating that much of Trump’s trade duties could remain in place. “The world is still faced with the tariff reality and markets are taking a more conservative bet that much of Trump’s tariffs would stay,” said Fiona Lim, Senior FX Strategist at Maybank.
MSCI’s index of Asian emerging market equities dropped 0.6%. Thailand’s benchmark index fell as much as 1.1% to its lowest in over a month, while Seoul stocks slid nearly 1%. The Philippine market also lost 0.7%. Markets in Indonesia and Taiwan were closed for public holidays.
Despite the tariff headlines, the US dollar remained soft on Friday, poised for its fifth consecutive monthly decline amid broader concerns over US fiscal stability. Regional currencies showed a mixed performance but continued their upward trend for May.
The Thai baht and South Korean won declined 0.3% and 0.4%, respectively, while the Malaysian ringgit and Philippine peso edged 0.1% higher. The Singapore dollar is on track for its fifth straight monthly gain.
The MSCI emerging market currency index rose more than 2% in May, marking its best month since November 2023. The won climbed nearly 4% amid speculation of coordinated currency action following meetings between Seoul and Washington.
