Asia's currencies are moving in opposite directions, and the dividing line runs through two products: semiconductors and crude oil.

Economies selling chips and electronics into the artificial intelligence boom have seen their currencies climb to multi-year highs. Those that depend on imported fuel are struggling, with crude above US$100 a barrel. The split leaves the region exposed in different ways as the US Federal Reserve meets this week.

The winners: won and yuan

The Korean won touched 1,320 per dollar on Oct. 26, its strongest since October 2024, according to Trading Economics. The dollar has fallen 2.86% against the won over four weeks and 7.63% over 12 months. On July 1, it took 1,559.2 won to buy a dollar, Korea's Financial News reported.

The driver is trade. South Korea's September exports hit a record US$120.94 billion, up 83.5% from a year earlier, with semiconductor shipments up 263%, Trading Economics said.

China's yuan touched 6.67 per dollar on Oct. 26, its strongest since June 2022, and has gained more than 4% this year. Chinese exports rose 36.3% from a year earlier in September, and the People's Bank of China has allowed its daily reference rate to strengthen, Trading Economics reported.

The export surge reaches beyond those two economies. Taiwan's September exports hit a record US$87.22 billion, up 60.9%, Focus Taiwan reported, citing the Ministry of Finance, which credited demand tied to AI and other technology.

The strugglers: rupiah and rupee

The Indonesian rupiah weakened past 18,100 per dollar on Oct. 26, its fourth straight daily loss and weakest level since late July. It is down roughly 8% this year, according to Trading Economics, which cited oil prices above US$100 and fiscal concerns as pressures. Criticism in Jakarta of MSCI's proposal to change Indonesia's market classification has also raised worries about foreign outflows, the data provider noted.

The Indian rupee slipped to about 95.4 per dollar the same day as Brent crude rose above US$117 a barrel following Houthi attacks on Saudi Arabia, Trading Economics reported. It had rallied to nearly 94.30 earlier in the month, helped by central bank intervention and a special dollar window the Reserve Bank of India opened for state-run oil companies.

Trading Economics has repeatedly cited higher oil prices as a weight on both currencies, through fiscal worries in Indonesia and dollar demand in India.

The yen sits between the two groups. It traded at 157.71 per dollar on Oct. 27, giving back a safe-haven rally from the previous week. Tokyo and Washington jointly intervened to support the yen in July, after it fell to its weakest level in about 40 years, Kyodo News reported at the time.

The Hong Kong dollar, tied to the US dollar, has hovered near the weak end of its 7.75 to 7.85 band, at about 7.844 on Oct. 26.

The common factor: the dollar

The dollar itself has been steady rather than strong. The dollar index stood at about 102.1 on Oct. 27, after hovering near a three-week low late last week, Trading Economics data show. The divergence across Asia therefore reflects local trade and capital flows more than a broad dollar move.

The Fed could change that. It raised its target range to 3.75% to 4% on Sept. 16, saying “inflation remains elevated.” Markets priced roughly a 90% chance of a hold when it announces its decision on Oct. 28, and about an 82% chance of an increase in December, according to Trading Economics.

A firmer signal on December would tend to support the dollar and add pressure on the region's oil importers. A softer message could give the rupiah and rupee some room while extending the rally in export-driven currencies.

Oil may matter more. With Brent swinging on Middle East supply concerns, crude prices remain the clearest dividing line between Asia's currency winners and losers for the rest of the year.