If there’s one spot that investors should look to amid all the fiscal risks in most major economies and the de-dollarisation narrative, it’s Asia ex-Japan (AxJ). The US has its own set of issues and so does Europe, and with Japan also facing a power struggle between the government and central bank, there are clear considerations for a shift of money to the other side of the globe.
That is what we saw happen in 2025, despite the first half of the year being littered by risks of Trump’s tariffs. And we’re seeing sentiment continue to build towards that again as we get into 2026.
The latest Asian currency positioning poll by Reuters here is one that underscores the prevailing narrative and once again, Asian currencies are the ones that might actually benefit the most this year amid all the havoc around the globe. That despite the typical correlation that geopolitical tensions and flight to safety positioning can be bad for emerging market currencies.
For some context, this poll is one that focuses on what fund managers believe are current market positions in the nine Asian currencies listed:
Some interesting findings:
- Long Chinese yuan bets continue to nudge higher to the largest in 15 years
- Traders pull back on bets against the South Korean won after months of bashing
- Long bets on the Singaporean dollar rise to the highest since July last year
- Long Thai baht bets climb to the highest since June last year
- Bullish bets on the Malaysian ringgit (strongest performing Asian currency in 2025) continue to hold
