Elevated yields buoy Indonesian rupiah; South Korea, Taiwan stocks slide
TLT•Indonesia’s 10-year bond yield held near a six-year high of 7.707%, helping the rupiah firm, while Jakarta stocks fell as much as 3%. South Korean and Taiwanese stocks declined amid investor unease over AI investment returns.
1. Indonesian yields rise
Indonesia’s 10-year bond yield held at 7.707%, its highest since mid-May 2020 and more than 150 basis points higher this year. Rising oil prices and concerns about a proposed review of Indonesia’s market status by MSCI have contributed to the increase. The rupiah firmed as elevated yields helped it pull away from record lows reached earlier in the week.
2. Regional stocks slide
Jakarta stocks fell as much as 3%. South Korea’s benchmark index ended 1.2% lower and Taiwan’s lost 0.9%, as investors questioned whether large AI investments will generate commensurate returns. Samsung Electronics fell 4.1% after reporting earnings below analyst expectations, while TSMC shares declined more than 0.4%.
3. Currencies strengthen
Asian currencies broadly strengthened after the Federal Reserve held rates. The South Korean won and Malaysian ringgit each rose 0.4%, while the Philippine peso gained 0.1%. The Thai baht slipped 0.2% after Thailand’s central bank left its key rate unchanged for a fourth consecutive meeting.
