Warning sign? Asia's biggest currency gain in 20 years may be about to end

Asian currencies may be on the verge of a correction after completing the best year in at least two decades. The warning sign? Indonesia’s rupiah slumped to a two-year low last week.

The rupiah is seen as a bellwether of sorts for Asia given the high foreign ownership of the nation’s bonds. The currency is typically among the first in the region to be sold when sentiment sours, and this often heralds a broader decline among its peers.

The rupiah has tumbled 1.6 percent in the past month, the worst performer in Asia and third-worst among 24 emerging-market currencies worldwide.