On Investors’ Minds - APAC Edition Asia markets are on a tear in 2025. What are the keys for the rally to continue?
Sep 29, 2025
Mark Davids, Senior Portfolio Manager at J.P. Morgan Asset Management, shares insights on the remarkable performance of Asian markets in 2025. He discusses how the weakening U.S. dollar benefits Asian economies by enhancing monetary policy flexibility. Davids highlights strong export growth driven by AI despite currency translation risks. He explains the factors behind China's market recovery and explores stock selection as key to navigating opportunities across the region, with notable mention of AI investments and Korea's promising outlook.
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Weaker Dollar Frees Asian Policy And Capital
- A weaker US dollar generally fuels capital flows into Asia and allows local central banks to cut rates.
- Lower domestic rates improve liquidity and reduce local companies' cost of capital, supporting equities.
Export Growth Can Outweigh FX Headwinds
- Exporters face FX translation pain from stronger local currencies but revenue growth from AI-led demand can more than offset that.
- Taiwan's export growth (~30%) shows revenue strength can dominate short-term FX headwinds.
Tariff Threats Rewired, Not Crushed, Trade
- Announced tariffs caused market noise but implemented tariffs were less severe and China's export share kept rising.
- China has rerouted trade toward emerging markets, increasing trade with Southeast Asia versus the US.