Asian currencies: Philippine peso and S Korean won down
Next week, the US calendar is packed with President Donald Trump's August 1 trade deadline, a Federal Reserve rate decision, the monthly jobs report and major corporate earnings all on tap. The Bank of Japan will also hold its policy meeting next Thursday.
'It looks like markets are going to take much of a breather going into the weekend and also into the next week, where there can be more trade-related updates as we build up to the 1 Aug deadline,' said analysts at Maybank.
Still, equities across the region remained on course for solid weekly gains, buoyed by improved risk sentiment and hopes of more agreements ahead of a key August 1 deadline.
Most Southeast Asian bourses rallied over the past two weeks after Vietnam, Indonesia, the Philippines and Japan sealed favourable trade pacts with Washington.
The MSCI Emerging Asia equities index dropped 0.7% after reaching its highest level since September 2021 on Thursday. The benchmark is still up over 3% this month and on track for a fourth consecutive month of gains.
In Kuala Lumpur, equities fell nearly 1%, paring back a rally that had lifted the index more than 10% since its April lows. Stocks in the Philippines and Indonesia
also slipped on the day, though both were set to post weekly gains of between 2% and 3%.
Regional currencies softened alongside equities, as the Philippine peso and South Korean won each dropped 0.6%, while the Malaysian ringgit and Indian rupee slipped 0.1% and 0.2%, respectively.
Vietnam bucked the trend, with the benchmark index jumping 0.7% to 1,531.1 points — its highest level since January 2022.
Vietnamese equities have surged since early July, after the country struck a trade deal with Washington that cut expected tariffs to 20% from a feared 46%.
Singapore's FTSE Straits Times Index declined 0.8%, snapping a 14-session winning streak, as investors took profits following a five-week rally driven by industrials, REITs and defensives.
The city-state's central bank is set to meet next week, with economists split over whether the Monetary Authority of Singapore will ease policy or hold steady.
Analysts at Barclays expect further monetary easing across major emerging Asian central banks, though at a slower, more cautious pace, reflecting 'a greater willingness to wait and see amid the ebb and flow of US trade policy,' they wrote.
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