BENGALURU (Aug 14): Most Asian currencies rose on Friday, led by Taiwan's dollar, as continued demand for AI-related stocks drew foreign investors to the island's technology shares and boosted South Korean equities.

The MSCI index of emerging market currencies edged higher, with Taiwan's dollar and South Korea's won leading gains. Indonesia's rupiah and Malaysia's ringgit ticked up 0.2% and 0.1%, respectively, on the day.

Taiwan's dollar rose as much as 0.6% to a more than one-month high of 31.991 per dollar, its third straight day of gains. It's up nearly 1% this week, the best weekly performance since early September 2025.

"The dividend outflow pressure is starting to abate in Taiwan because we are nearing the end of the dividend payout season in Taiwan. So that could also help," said Lloyd Chan, a forex strategist at MUFG.

Large dividends can pressure the Taiwan dollar as foreign investors convert payouts.

The central bank has historically defended the Taiwan dollar near 32.5 per US dollar, a level that may also prompt exporters to sell dollars, Chan said.

There has been speculation that the US Treasury Department may take a more hands-on approach to managing exchange rates. Taiwan is one of 10 trading partners on its currency monitoring list.

Taiwan's stocks ended 0.5% lower, snapping a four-day rally after rising as much as 0.8% to a more than one-month high during the session.

South Korea's Kospi closed up 2.4% at a near three-week high, extending a chip-and-tech rally that granted Seoul's index its first weekly gain of more than 11% in eight weeks.

TSMC, the world's largest contract chipmaker and a key supplier to Nvidia and other AI firms, has helped lift Taiwan's benchmark index as demand for advanced AI chips stays strong.

MSCI's EM Asia stocks index, largely dominated by South Korea and Taiwan, rose 0.4%. The benchmark has now gained 3.6% for the week and is set for its best week since mid-June.

Malaysia's central bank said the economy could expand by around 5% this year, toward the upper end of its 4%-5% growth forecast, after stronger-than-expected second-quarter growth. The ringgit rose 0.1%, while the benchmark index slipped 0.2%.

Key risks for Malaysia are a renewed US-Iran war, a prolonged Hormuz blockade driving oil above US$100, and domestic El Niño and political disruptions that could dampen but not derail growth, said Kim Leng, professor of economics at Jeffrey Cheah Institute on Southeast Asia.

Indonesian assets advanced after President Prabowo Subianto sought to reassure investors that a new state export firm would monitor, rather than control, commodity exports, easing concerns about potential state intervention. The stock benchmark index gained 0.6%.

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