Asia FX Weekly

Latest edition · September 4, 2026

Asia FX Weekly Focus on China data and US CPI

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.

In this edition of Asia FX Weekly, MUFG highlights the recent rally in the Japanese yen down to 155.30 per USD and concurrent dollar weakness following dovish comments from Fed Governor Waller. Across Asia, KRW, THB, and SGD are poised as the primary beneficiaries of extended JPY strength. China faces an uneven recovery where surging AI-related exports contrast with subdued domestic borrowing, though new RMB 800bn policy financing should gradually assist. Across regional central banks, the Bank of Korea and Bank Indonesia retain hawkish biases, whereas Malaysia and Thailand are expected to maintain unchanged policy settings.

Key takeaways from the latest edition

• 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.

What this series covers

• 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

Edition archive

• Asia FX Weekly Focus on China data and US CPI

  September 4, 2026

• Asia FX Weekly Asia FX eyes Warsh and PMI numbers

  August 28, 2026

• Asia FX Weekly - Focus on Asia's inflation data and FOMC minutes

  July 3, 2026

• MUFG Asia FX Weekly - Pivot towards US labour and Asia activity data 20260626

  June 26, 2026

• Asia FX Weekly - Tug of war between oil and US rates

  June 19, 2026

• Asia FX Weekly - Central bank decisions in focus

  June 12, 2026