During the holiday break, US President Donald Trump’s tariffs — and a subsequent retaliation by China — trigged a sharp sell-off in risk assets, leading to a rout across Asia.
“Given de-risking of global portfolios last week, it was a rush for the exits this morning,” said John Foo, founder of Valverde Investment Partners. “Good value is starting to emerge in Indonesia and Asean in general post this sell-off, especially given Indonesia is a domestically driven economy.”
Investors have already been fretting over President Prabowo Subianto’s populist measures and the impact on economic growth. The JCI was down 8% in 2025 heading into the holiday break, and the rupiah was the worst-performing Asian currency, with a 2.8% drop against the US dollar.
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Another trading halt will be triggered if the benchmark Jakarta Composite Index falls more than 15%.
Prabowo is set to deliver a speech at 1pm Jakarta time outlining the government’s response to the turmoil, according to a statement from his office. The government is planning to negotiate rather than retaliate, a senior minister said over the weekend.
“We should expect policy makers to lean against the wind,” said Christopher Wong, an FX strategist at OCBC. Still, the currency may weaken toward 17,000 per US dollar “should sentiment and trade relations fail to improve,” he said.
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The US is among Indonesia’s largest trading partners, and a 32% tariff is set to hit key sectors like textiles, electronics and palm oil. A delegation from Jakarta is scheduled to visit the US in coming days to negotiate on the tariffs.
Bank Indonesia intervened in the offshore non-deliverable forwards market on Monday to stabilise the rupiah, and said it was ready to respond “aggressively” in the onshore market Tuesday.
Meanwhile, Vietnam’s stocks plunged after the market reopened following Monday’s holiday, continuing their sell-off amid concerns over US tariffs.
The benchmark VN Index tumbled as much as 5.9% on Tuesday to its lowest level since January 2024. Bank for Investment and Development of Vietnam and Bank for Foreign Trade of Vietnam were among the biggest drags on the measure.
Margin-forced selling “kicked in right from the beginning of the session and pushed many stocks down to their limits”, said Nguyen Anh Duc, head of institutional brokerage and investment advisory at SBB Securities.
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Last week, Vietnamese shares erased the year’s gains after Trump hit the country with one of Asia’s highest tariff rates of 46%.
“Investors are reducing exposure to prepare for the worst-case scenario,” SSI Securities wrote in an April 4 note. “While most do not believe Vietnam will face a 46% tariff after negotiations, if it does happen, it could significantly alter the investment outlook for Vietnam for the next six to 12 months.”
The US is Vietnam’s largest export market and the levies could dent the nation’s ambitious goal of boosting growth to at least 8% this year.
Vietnam’s Party Chief To Lam offered to remove all tariffs on US imports, according to an April 5 letter seen by Bloomberg. Lam requested that Trump not apply any additional levies or fees on Vietnamese goods and asked him to postpone the implementation of the 46% tariff by at least 45 days after April 9.
Outflows are also exerting pressure, with global funds selling Vietnamese shares for nine straight weeks, data compiled by Bloomberg show. That takes withdrawals so far this year to about US$1.3 billion.
Separately, Vietnam’s steel stocks dropped on Tuesday, with Hoa Phat Group and Hoa Sen Group both declining 6.9% after news website VnExpress reported that the US Department of Commerce will impose preliminary anti-dumping duties on the country’s galvanised steel products, at rates ranging from 40% to 88.12%.
Charts: Bloomberg
