Goldman Sachs said in its latest report that the yen has gained more than 4% since early September, with a more hawkish Bank of Japan and market expectations around a possible asset allocation shift by Japan’s Government Pension Investment Fund, or GPIF, prompting investors to reassess the currency’s medium-term path. The bank said that if GPIF were to move part of its portfolio from overseas assets into domestic fixed income, the yen could see a structural appreciation. Using GPIF’s roughly $2 trillion in assets under management, Goldman estimated that a 5 percentage point increase in domestic fixed-income allocation would theoretically translate into about $100 billion of USD/JPY selling. The report said that size is roughly equal to half of Japan’s annual current account surplus and could also trigger an unwind of previously built yen-funded carry trades. Goldman added that the effects could spill into broader Asian currency markets. Looking at data since 2022, the bank said the Korean won has been the most sensitive to moves in the yen, with a beta of about 0.45, followed by the Thai baht and the Malaysian ringgit. Offshore yuan and the Taiwan dollar were also cited. Goldman kept its view favoring the Taiwan dollar over the yuan in North Asia, and in South Asia it maintained a bearish stance on the Philippine peso and a constructive view on the Indian rupee versus the peso. The bank noted that a GPIF reallocation into domestic bonds remains a scenario analysis, not a formal decision.

The Taiwan dollar strengthened past the 32-per-U.S.-dollar mark, with USDTWD at 31.991 at press time, as overseas investors extended their buying streak in Taiwanese equities and MSCI raised Taiwan’s weighting across three major indexes. Data from Taiwan’s stock market showed foreign investors were net buyers for four straight trading sessions from Aug. 10 to Aug. 13, with cumulative net purchases of NT$160.786 billion over the period and NT$187.455 billion so far in August. MSCI’s latest quarterly review lifted Taiwan’s weight in the MSCI Global Standard Indexes, the MSCI Emerging Markets Index, and the MSCI AC Asia ex Japan Index. In the MSCI Emerging Markets Index alone, Taiwan’s weighting rose from 26.60% to 26.85%, a 0.25 percentage-point increase, setting up passive fund rebalancing flows ahead of the effective date. Bloomberg, citing DTCC-compiled data, also reported a shift in derivatives positioning. Traders built large U.S. dollar-Taiwan dollar put option positions, pushing July notional derivatives turnover to nearly $8 billion. It was the first month this year in which put volume exceeded call volume. Citigroup said some client trades were targeting 31.5, while broader support also came from Asian central bank intervention and expectations that the Federal Reserve would pause rate hikes.

EDXM International plans blockchain-based won futures backed by KRWQ and settled in USDC, aiming to bring real-time crypto-native access to KRW/USD risk trading.

ING expects the Korean Won to trade within the 1,450–1,550 range against the USD due to persistent geopolitical risk premium, despite strong export fundamentals. The range acts as a technical and psychological barrier, with implications for Asian FX and risk assets.

Bank of America forecasts USD/KRW to reach 1,400, a 12-year low for the Korean Won. Economic pressures, policy divergence, and structural challenges create a perfect storm with implications for Asian FX and crypto markets.

Bank of America expects USD/KRW to rise to 1,400, potentially pushing the Korean won to its weakest level since 2012. Policy divergence, trade deterioration, and capital outflows are cited as key drivers, with possible spillover into Asian FX and crypto markets.