Singapore — Currencies across the Asia-Pacific region showed an upward trend against the U.S. dollar on Tuesday, reflecting investor uncertainties tied to U.S. policy developments under President Donald Trump. The dollar index, tracking the greenback’s performance against other major currencies, slipped 0.13% to reach 96.745 by early afternoon Singapore time.
The Japanese yen, often sought for safety in turbulent times, gained 0.23% against the dollar, trading at 143.68. The Indian rupee increased by 0.11%, reaching 85.59, while the offshore yuan from China inched up 0.01% to 7.5175. Both the Australian and Taiwanese dollars also saw marginal improvements, rising 0.11% and 0.07% respectively to 0.6573 and 29.161.
In contrast, the South Korean won experienced a slight drop, depreciating 0.03% to 1,352.82 against the dollar. The Singapore dollar remained stable, unchanged at 1.2715, while the Thai baht fell by 0.15% to 32.46. However, the Philippine peso displayed resilience, gaining 0.08% to rest at 56.23. The Malaysian ringgit outperformed many of its peers, climbing 0.48% to 4.19.
In South Korea, manufacturing activity has continued to show signs of struggle, marking a contraction for the fifth consecutive month in June. According to a private sector study, the S&P 500 Global South Korea Manufacturing Purchasing Managers’ Index rose slightly to 48.7, remaining below the critical threshold of 50 that distinguishes growth from contraction. Companies cited ongoing declines in output and new orders, maintaining a cautious approach toward inventory and employment levels.
Economist Usamah Bhatti from S&P Global Market Intelligence noted that the upcoming months could present a mixed picture, as businesses continue to face declining employment and diminishing workloads while experiencing a slight uptick in sentiment.
Japan’s manufacturing sector, on the other hand, experienced a turnaround in June, with a recorded increase for the first time in over a year. The au Jibun Bank flash Japan Manufacturing Purchasing Managers’ Index climbed to 50.4, signaling modest growth. Despite this positive development, challenges persist as domestic and international orders continued to dwindle. Annabel Fiddes, an economics associate director at S&P Global Market Intelligence, emphasized the need for sustained demand improvement to facilitate a broader recovery.
The sentiment among major Japanese manufacturers also saw a slight boost, according to the Bank of Japan’s quarterly Tankan survey. Business confidence improved, with a headline index rising to +13 in June from +12 in March, suggesting cautious optimism. Conversely, sentiment among large non-manufacturers declined slightly, reflecting the uncertainty that remains prevalent in the economy.
As markets opened in Japan, the Nikkei 225 index faced a downward trend, reversing gains from the previous session. The index fell 0.67% to 40,233.53, while the broader Topix index dipped 0.3%. Futures indicated a lower opening for various Asia-Pacific markets as investors weighed the ongoing economic signals against a backdrop of uncertainty.
Overall, the region remains in a delicate balance, with currency fluctuations reflecting the complex interplay of global economic forces and local industry conditions.