The Fed's rate cut and positive signs from falling weekly jobless claims in the US have boosted hopes for an economic soft landing. This has energized Asia's emerging markets, where investors are diving into risk assets. Singapore's share index is trading at a six-year high, with the Singaporean dollar on track for its best week in a month. Malaysia's ringgit has reached its highest level since March 2022, and Thailand's baht has logged its longest weekly gain streak since June 2020. The Philippines cut reserve ratios, slightly tempering gains in the peso and stocks. Indonesia's rupiah appreciated to a 13-month high, although its stock market faced volatility due to FTSE Russell's unexpected move.

Asian emerging markets have responded strongly to the Fed's rate cut, reflected in soaring stock indexes and appreciating currencies. For instance, Singapore's index is on a winning streak, supported by a strong US economic outlook. However, investors should remain cautious: while the Fed's actions and positive data spur confidence, market dynamics in Indonesia show that abrupt changes can still impact stock performance.

The bigger picture: Global economic shifts influencing Asia.

These developments highlight how US economic policies can have significant global impacts. Asian emerging markets are particularly sensitive to these changes, as seen with recent rate cuts and currency appreciations. As China holds off on further monetary easing while other nations like Indonesia make strategic adjustments, it's clear the global economic landscape remains complex and ever-changing.