According to Michael Wan at MUFG, the South Korean Won (KRW), Thai Baht (THB), Singapore Dollar (SGD), and, to a lesser extent, the Philippine Peso (PHP) are positioned as the main beneficiaries among Asian currencies if the Japanese Yen continues to strengthen. This is attributed to their higher sensitivity to USD/JPY movements, with KRW standing out due to a notable rise in both conditional beta measures and correlation over the past two years [1]. In contrast, the sensitivity of the Chinese Yuan (CNH), Taiwan Dollar (TWD), and Indian Rupee (INR) to Yen movements has decreased since 2025 [1].
Recent Asia PMI data, released yesterday, indicate that export momentum in the region remains robust. Lead indicators tracked by MUFG suggest that while export growth is expected to slow into 2027, it will remain at a high level overall [1]. This strong export backdrop supports the positive outlook for the aforementioned Asian currencies in the context of ongoing Yen strength [1].
Wan emphasizes that, among the Asian FX complex, KRW is particularly sensitive to Yen moves, followed by THB, SGD, and PHP in that order. The analysis suggests that if the trend of Yen appreciation persists, these currencies are likely to benefit, with the impact most pronounced for KRW [1].
CONCLUSION
MUFG's analysis highlights that continued Japanese Yen strength could favor select Asian currencies, especially the South Korean Won, against a backdrop of resilient regional exports. While export growth may moderate into 2027, it is expected to remain robust, supporting a positive outlook for KRW, THB, SGD, and PHP in the Asian FX market.