As the U.S. election approaches, investors are selling yen and moving into cash, Indian assets, select parts of China’s markets, and Singapore dollars, anticipating shifts in global financial flows. Asia’s markets are poised for volatility based on the election outcome, prompting fund managers to reduce exposure to vulnerabilities in Japanese manufacturing and Hong Kong stocks while exploring opportunities in more stable regions.
“We actually view China as a decent place to hide,” said Jon Withaar, manager of an Asia special situations hedge fund at Pictet Asset Management. He noted that China has strong domestic drivers and a lower correlation with global market movements. “The best thing for us to do is just sit on the sidelines and wait,” he added.
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With the November 5 election approaching, betting odds favour Republican Donald Trump over Democrat Kamala Harris, leading to market reactions like selling U.S. bonds and buying dollars. In Asia, the low-yielding yen is being sold off against the dollar. Nick Ferres, chief investment officer at Vantage Point Asset Management, remarked, “We sense that Donald is going to win, and it might even be a Republican sweep.” He added that “the implication for the dollar is Trump is probably a bit more pro-growth.”
The yen has dropped 6.5% against the dollar through October, marking the largest decline of any G10 currency.
Investors are targeting markets less exposed to tariff risks and buoyed by demographic trends and China’s expected stimulus initiatives. Ray Sharma-Ong of ABRDN stated, “The Singapore dollar would stand tall against regional currencies,” while Indian stocks may offer insulation due to strong domestic growth and a low export-to-GDP ratio.
John Hempton, founder of Bronte Capital, expressed uncertainty: “I honestly don’t know what Trump can achieve. If I genuinely don’t know what I’m doing, then I just try and stay out of the way – try to minimize the damage.”
Goldman Sachs has noted increased exposure to China and North Asia among emerging market funds, which could accelerate after the election. “We see emerging markets equities to be well placed to outperform next year regardless of the outcome,” said Gary Tan, portfolio manager at Allspring Global Investments, highlighting potential benefits from a Harris win.
