MUFG
May 19, 2026
Asia FX Talk: EM Asia Currencies Remain Under Pressure
FX StrategyFXRates Govt BondsMacro Economic IndicatorsOther
Asian currencies and global bonds are under severe pressure due to Middle East war-related inflation, though a potential pause in US-Iran hostilities offered a brief reversal.
Key Takeaways
- 1.Asian emerging market currencies are hitting record lows (IDR at 17,663, INR at 96.36) driven by a global bond selloff and Middle East tensions.
- 2.A sharp global bond selloff is being fueled by inflation concerns linked to the closure of the Strait of Hormuz, with US 30-year yields reaching 5.16%.
- 3.Japan's Q1 GDP beat expectations at 2.1% annualized, increasing the probability of a Bank of Japan rate hike to 1.0% in June.
Table of Contents
- Market Highlights
- CHART 1: US-ISRAEL-IRAN WAR (28 FEB -18 MAY 2026)
- Disclaimer
- CERTIFICATION
- DISCLAIMERS
- Legal entities and branches
- General disclosures
- Country and region specific disclosures
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Authors
Michael Wan
Securities
USDIDRUSDINRUS 30-Year TreasuryUSDJPYCO1
Themes
Geopolitical Risk and Energy InflationEmerging Market Currency FragilityMonetary Policy Divergence
Regions
Asia PacificMiddle EastNorth AmericaIndonesiaIndiaJapan