MUFG says Asia’s exports started 2026 strong. This is helping several regional currencies, even as markets face uncertainty from new US tariff investigations under the Trump administration. MUFG expects Asian exports to speed up in 1H2026, which may support export-led currencies more than INR and IDR. The report says the US plans to use Section 232 to review products such as batteries, cast iron and iron fittings, electric grid equipment, telecom equipment, plastics and plastic piping, and industrial chemicals. It also refers to Section 301 investigations into actions the US sees as unfair or discriminatory by trading partners.

Asias Export Momentum Builds

MUFG points to a 25% year-on-year jump in Thailand’s exports and a 47% year-on-year rise in South Korea’s exports for the first 20 days of February, adjusted for working days. It links this strength to leading signals such as industrial metal prices and demand tied to AI and electronics. The report sees support for KRW, MYR, and to some extent CNY. It expects INR and IDR to lag. Even with fresh US tariff probes creating headlines, MUFG says the key story for Asia is the export surge seen in early 2026. This matches the leading indicators it tracks and suggests export growth should keep improving through at least the first half of the year. As a result, MUFG sees a clearer split between stronger and weaker regional currencies. The report says the evidence is strongest in electronics, where AI-driven demand is lifting orders. South Korea’s final February export figures showed a 41.5% year-on-year increase, largely driven by a more than 60% rise in semiconductor shipments. This fits the broader global picture: the Semiconductor Industry Association reported global sales in January 2026 were up 20% versus a year earlier, extending a growth run that began in late 2024.

Positioning For Currency Divergence

MUFG also points to industrial metal prices as a useful forward-looking gauge. Copper on the London Metal Exchange recently moved above $10,500 per tonne, a two-year high last seen during the early 2024 recovery. This suggests factories are increasing output, which typically helps export-heavy Asian economies. However, the report warns that traders should stay alert to trade-policy headlines from the new US administration. Discussion of Section 232 and 301 investigations across many industrial goods has kept currency volatility higher. The VIX has held near 19, up from the calmer conditions seen through much of 2025. That means long positions may still face sharp, politically driven swings. Against this backdrop, MUFG says derivative strategies should focus on export-focused currencies. It suggests buying call options or taking long futures positions in the Korean won (KRW) and Malaysian ringgit (MYR), which may benefit most from the electronics and manufacturing upswing. It also recommends avoiding currencies that are more tied to domestic conditions or have different trade exposure, such as the Indian rupee (INR) and Indonesian rupiah (IDR). Recent data shows India’s inflation is still above the central bank’s target, while Indonesia’s trade surplus narrowed in January. MUFG adds that a pairs trade—such as long KRW versus short INR—could be one way to express this regional split. Create your live VT Markets account and start trading now.

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