Multiple Asian currencies came under pressure on Friday as renewed US-Iran hostilities near the Strait of Hormuz drove investors toward safe-haven assets, strengthening the US dollar ahead of the closely watched US non-farm payrolls report.
Geopolitical Tensions Rattle Markets
Fresh clashes between US warships and Iranian forces in the Strait of Hormuz area rattled currency markets across the region, according to MUFG Research. The confrontation follows weeks of escalating tensions after US military strikes on two locations in Iran near the strait on May 7, and an earlier incident in which Iran claimed its navy forced a US warship to retreat from the waterway. The hostilities trace back to President Donald Trump’s April announcement of a US Navy blockade of the strait after peace talks with Iran collapsed.
The risk-off mood boosted the US Dollar Index, which held firm around the 98.00 level, while several Asian currencies extended losses.
Philippine Peso, Rupiah Under Strain
The Philippine peso remained vulnerable after the Bangko Sentral ng Pilipinas reported that the country’s gross international reserves fell to $104.1 billion at end-April, a 15-month low last seen in January 2025. The decline from $106.6 billion at end-March followed foreign debt payments and central bank forex interventions, and marked a retreat from the record high of $113.3 billion reached in February 2026.
Indonesia’s rupiah also stayed under pressure despite Bank Indonesia tightening rules on foreign currency purchases, cutting the threshold for undocumented cash purchases from $50,000 to $25,000 after the currency slumped to a series of record lows. Currency analyst Ibrahim Assuaibi estimated roughly 50 percent of the rupiah’s weakness stems from geopolitical factors, with rising oil prices serving as the primary transmission channel.
Yen Intervention Fears Cap Dollar Gains
The USD/JPY pair saw muted activity as the yen stabilized near 156.83, with intervention risks keeping dollar buyers cautious. Bloomberg reported that Japanese authorities likely deployed around $30 billion — approximately ¥4.68 trillion — in follow-up currency intervention just days after an earlier round of action, underscoring Tokyo’s resolve to defend the yen.
Malaysia’s ringgit eased ahead of the US jobs data release, with analysts noting that an upside surprise in payrolls could further bolster the dollar. MUFG noted that several labor market indicators pointed to a stronger-than-expected April NFP reading, with consensus set at a moderate 65,000 new jobs.
