As 2026 unfolds, the global foreign exchange market is undergoing a significant structural shift, with subtle changes in the Trump administration's stance on a strong dollar evolving into a major positive for Asian currency assets. With the U.S. Dollar Index falling to a four-year low in late January, its weakest since early 2022, market strategists point out that Washington's inclination to use currency depreciation to narrow the trade deficit and revitalize exports is becoming increasingly apparent. Although tariff threats persist, Trump's comment that the dollar's value is "very good" has been interpreted by international financial institutions as tacit approval for a weaker dollar. This revision in policy expectations has swiftly offset previous risk-off premiums, providing strong momentum for a reversal in the long-pressured Asian forex market. Strategists note that, given Trump's focus on the region's exports, Asian currencies are in the most favorable position and are expected to benefit from a renewed weakening of the dollar. They add that thin market liquidity and trader anxiety are exacerbating these fluctuations.

Win Thin, Chief Economist at Bank of Nassau 1982 Ltd., stated, "The Trump administration is taking a calculated risk. Currency depreciation can be a good thing before the situation gets out of hand." "Typically, the forex market is the best reflector of market unease about a country's policies and economic prospects, so this dollar weakness is noteworthy." "I get the sense that the U.S. is focusing its attention on major Asian exporters like Japan and Korea. Both currencies have shown signs of turbulence since Trump took office." "With the 150 level now in the active range, the yen should see some catch-up. Given the expected monetary policy divergence this year, this currency pair should be much lower – we expect the Bank of Japan to hike rates by 50 basis points, while the Fed will cut by 75-100 basis points."

Bob Savage, Head of Market Strategy & Insights at BNY Mellon, commented, "Trump's remarks are his off-the-cuff view that he believes the dollar is overvalued. Overall, what we're seeing is hedging pressure if you hold dollar assets." "As for value FX in Asia-Pacific – the Korean won and the Japanese yen have more room to run." "In the near term, the USD/JPY 152 level is important; there's discussion around derivative trading at that level. In an extreme scenario, the yen could appreciate to 148, barring actual intervention from the U.S. and the Bank of Japan – which seems unlikely before the election and before the BoJ (acts)."

Erik Nelson, Strategist at Wells Fargo, said, "He has preferred a weaker dollar for some time, and these comments are also consistent with his past views on the dollar." "Trump has repeatedly stated that a strong dollar hurts exports and places a heavy burden on companies, while a weak dollar allows you to earn more money. For decades, he has complained that Asian currencies are too weak. So, while these remarks are attention-grabbing and are impacting the market, they still don't feel like new information." "Unless there is a clear change in dollar policy from the Treasury, and/or direct, broad-based intervention selling dollars in the market, this seems like an overreaction, likely driven by low participation/thin liquidity and more stop-loss orders from contrarian players being triggered."

Aroop Chatterjee, Strategist at Wells Fargo, noted, "I think this is largely consistent with what President Trump has said about the dollar in the past, except now the market has become extremely nervous following the currency check." "For the yen, intervention risks are particularly high ahead of the February 8th election, as the government wants to show stability in the yen and JGBs before the vote. It's noteworthy that the gains in high-yielding emerging market currencies have been more modest, as dollar positioning is either short or reduced longs."

Karl Schamotta, Chief Market Strategist at Corpay, stated, "The President's comments suggest that recent (rumored) support for Japanese intervention – aimed at boosting the yen's value – could be part of a coordinated effort to force the dollar lower against its major trading partner currencies." "This strategy might help reduce trade imbalances in the long run but risks triggering extreme financial turbulence and creating distortions in other parts of the global economy."