Report published September 4, 2026

Asia FX Weekly: Navigating China Data, US CPI Catalysts, and JPY Strength

MUFG · September 4, 2026

MUFG analyzes Asia FX and macro dynamics amid a sharp Japanese yen rally and softening US dollar driven by shifting Fed rate expectations. Near-term focus centers on the US August CPI release and Chinese trade, inflation, and credit data.

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Finvaulta summarizes MUFG's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.

Key Takeaways

1.Global FX markets saw sharp strengthening in the Japanese yen (from 160 to 155.30) alongside broad US dollar weakness after Fed Governor Waller leaned toward a rate hold.
2.The upcoming US August CPI print on September 11 is the central near-term global catalyst shaping FOMC expectations ahead of the September policy meeting.
3.China's economic data continues to demonstrate an uneven mix: strong AI-hardware-driven exports alongside soft domestic credit and demand, supporting gradual CNY appreciation.

Focus on China data and US CPI
FX views
FX PERFORMANCE
USD/CNY: Mixed signals from August PMIs
USD/KRW: KRW outperformed its Asian peers again this week
USD/INR: FCNR(B) inflows support the rupee, but domestic rates face renewed upward pressure
USD/VND: Strong foreign inflows cushion the dong, but a record trade deficit limits appreciation
USD/IDR: Rupiah rebound extends, but structural headwinds persist
Week in review
Capital Flows
Government bond yield spreads: Mixed for 2y and 10y
Central bank monitor
The week ahead
WEEKLY CALENDAR
Forecasts
Core indicators

Report data

THE BIG MOVES IN GLOBAL FX MARKETS WAS A SHARP STRENGTHENING IN THE JAPANESE YEN COUPLED WITH SOME DOLLAR WEAKNESS — as of September 4, 2026.

Metric	Estimate	Context
USD/JPY Exchange Rate	156.16 JPY per USD	Strengthened sharply from 160 level down to as low as 155.30
Asian Equities Net Foreign Institutional Flows	-7440 USD mn	Foreign investors extended net selling led by Taiwan and South Korea
India FCNR(B) Inflows	130 USD bn	Related dollar inflows exceeding USD130bn, well above expectations
China Official Manufacturing PMI	49.8 index	Better-than-expected reading but remained in contractionary territory
South Korea Semiconductor Exports	>200 % yoy	Helped accelerate Korea's exports growth by 5.7ppts to 68.7% yoy