MOST emerging Asian equity markets advanced on Monday, with Indonesia off record highs, while regional currencies were largely muted on investor caution ahead of the US Federal Reserve’s policy decision.
The MSCI index of emerging Asia equities and a broader index tracking Asian equities outside Japan edged 0.3 percent and 0.2 percent higher, respectively.
The Fed meeting this week is expected to be among the most contentious in recent history, with five of 12 voting members of the Federal Open Market Committee having either voiced opposition or skepticism about further easing.
Market sentiment will largely depend on how hawkish the Fed sounds, said Fiona Lim, a senior forex strategist at Maybank.
Despite sharp shifts in expectations for the December decision, Fed Fund Futures continue to price in two to three rate cuts in 2026, a view that would only change if inflation surprises on the upside, Lim added.
Market swaps imply more than an 86-percent probability of a Fed rate cut on Dec. 10.
Jakarta stocks slipped from their record high earlier in the day, but were still up 0.9 percent.
A 16.23-trillion rupiah ($974.48 million) stimulus package unveiled this year under new Finance Minister Purbaya Yudhi Sadewa, liquidity support for state banks and a stronger growth outlook have bolstered investor sentiment in the country.
“The fiscal stimulus can help to offset some of the trade headwinds that we are going to expect for next year,” said Lloyd Chan, a senior currency analyst at MUFG.
Chan added that a possible softer dollar going into 2026 would be supportive of equity inflows into Indonesia, with equities in the region valued fairly.
Taiwan’s equities rose as much as 1.2 percent and the Taiwanese dollar firmed 0.3 percent, with DBS noting that AI-driven tech demand and year-end electronics sales should continue to support exports ahead of the November trade data, due Tuesday.
Meanwhile, stocks in Malaysia slipped as much as 0.9 percent to their lowest since Nov. 28, while those in Singapore fell around 0.5 percent.
Equities in Bangkok declined 0.4 percent while the Thai baht was little changed.
Thailand has launched airstrikes into Cambodia as fighting broke out in multiple areas along their disputed border, after both countries accused the other of breaching a ceasefire brokered by US President Donald Trump.
Currencies in the region were muted, though the South Korean won firmed 0.4 percent and the Singapore dollar inched up marginally.
Philippine markets were closed for a holiday.
