BENGALURU: Indonesian stocks and the South Korean won led Asian equities and currencies lower on Thursday, as uncertainty over US President Donald Trump’s tariff plans dampened sentiment and bolstered the dollar.
Equities in Jakarta slipped over 2% to 6,458.4 points, its lowest since October 2021. The rupiah fell 0.5% to an over three-week low of 16,441 per US dollar and set to for third consecutive session of losses.
The MSCI gauge of emerging market currencies shed 0.2%, while a gauge of emerging Asian equities dropped 1.3%.
Overnight, Trump floated a 25% “reciprocal” tariff on European cars and other goods and signalled another month-long extension for looming levies on Canada and Mexico.
However, a White House official later said the previous March 4 deadline for the levies on Mexican and Canadian goods remained in effect, increasing uncertainty over US trade policy and sending the dollar index 0.2% higher.
The shifting tariff messages have fanned worries about US economic growth and inflation and caused the greenback to drop nearly 4% from a more than two-year high hit in January.
“Tariff imposition on these dates can undermine sentiments and lead to spikes in the USD, unless the implementation dates are rolled back again,” said Christopher Wong, a currency strategist at OCBC.
The Malaysian ringgit fell 0.3% to its lowest since February 19. The Thai Baht lost 0.4% and the Korean won
dropped 0.6%, after both countries’ central banks cut interest rates earlier in the week.
“From a weighted average tariff rate perspective in the Asian space, South Korea and Thailand impose a higher average weighted tariff rate on the US than the US does on these countries,” Wong said.
Reciprocal tariff rate adjustments from the US may potentially impact these countries more, and hence their currencies are subject to higher volatility from tariff announcements, Wong said.
Among regional stocks, equities in Seoul fell over 1%, dragged by losses in chipmaker SK Hynix, a main supplier for artificial intelligence darling Nvidia. The California-based company saw choppy trading in extended hours even after reporting strong first-quarter earnings.
Singapore stocks were flat after falling for three straight sessions. They hit record levels last week.
Equities in Taipei declined 1.5% while those in Shanghai gained 0.2%.
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