EM Asia Local Markets Compass: Mid-Year Outlook: Still the straggler in the EM pack

Research evidence excerpt

EM Asia Local Markets Compass: Mid-Year Outlook: Still the straggler in the EM pack

J P M O R G A N Global Markets Strategy

26 June 2026

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EM Asia Local Markets Compass:

Mid-Year Outlook

Still the straggler in the EM pack

• Duration: We enter 2H short Asian duration, paying rates in TW, TH and Global FX Strategy

AC MY. A hawkish Fed repricing and stronger dollar should provide Arindam Sandilya

additional upward pressure on regional yields. The principal risk to the (65) 6882-7759

view is a sharp AI equity correction that causes a wholesale rethink on arindam.x.sandilya@jpmorgan.com

hikes. Two shocks — parabolic AI momentum in North Asia and an oil/BoP JPMorgan Chase Bank, N.A., Singapore Branch

impulse from the Middle East — shattered Asian central banks' stay-on-hold Michael J Loh

plans in 1H26, forcing premature tightening in SG, PH and ID and rendering (65) 6882-1783

michael.loh@jpmorgan.com

the regional monetary landscape unrecognizable from the start of the year. JPMorgan Chase Bank, N.A., Singapore Branch

With the relief rally on the US-Iran peace deal now largely spent, the flavor of AC Tiffany Wang

tightening should shift in H2 from emergency FX firefighting to more (852) 2800-1726

conventional hikes driven by tech-fueled growth and rising inflation tiffany.r.wang@jpmorgan.com

expectations (BOK, BNM, CBC), compounded by El Niño food-price risks J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

skewed toward South Asia. Morgan Broking (Hong Kong) Limited