Real exchange rate behaviour is investigated for 11 Asian-Pacific countries between 1976 and 1990 using a modified version of principal components analysis. The standard principal component analysis is changed such that the results are independent of the numeraire currency. For the full-sample period the dominant Asian exchange rate movements are relative to Indonesia, Japan and the United States. Significant changes in the covariance structure have taken place since 1986. It appears that Asian-Pacific real exchange rate movements since September 1986 are dominated by Australia, Korea, New Zealand and Japan. This contradicts the popular notion of an emerging yen-block in the Asian-Pacific region. © 1992, Taylor & Francis Group, LLC. All rights reserved.