Asian stocks mixed ahead of Fed meeting; Indonesia, Thailand stand pat on rates
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Bank Indonesia, Bank of Thailand keep rates steady
Fed likely to cut rates by 25 bps
By Rajasik Mukherjee and Himanshi Akhand
Dec 18 (Reuters) -The Thai baht extended its decline while the Indonesian rupiah pared losses after their respective central banks held rates steady as expected on Wednesday, while regional stock markets were mixed as investors braced for the U.S. central bank policy.
The rupiah IDR= was last down 0.2%, and stocks in Jakarta .JKSE retreated 0.4% after Bank Indonesia (BI) held its main interest rate steady at 6%.
The Thai baht THB=TH was down 0.4% and stocks .SETI gained slightly after the central bank decision, last up 0.2%.
All eyes are on the Federal Reserve, which is widely expected to deliver a 25-basis-point interest rate cut on Wednesday, but the focus will be on the extent of rate reductions projected for 2025.
A slower pace of U.S. rate cuts would boost the dollar, putting further pressure on emerging Asian assets while quicker rate cuts would see Asian FX gain some footing.
"Worst case scenario for EM assets would be the Fed decides to hold the policy rate, upgrades the economic outlook and reduce the number of rate cuts vs the September Dot plot," Krung Thai Bank's Poon Panichpibool said.
In Indonesia, the central bank had cut interest rates in September, but has since held them steady to prioritize stabilising the rupiah which has been under pressure as the U.S. dollar strengthened.
The rupiah slipped to a four-month low of 16,120 earlier in the session.
"Going ahead whether BI (will be) able to cut interest rate or not will depend on the capital flows," Trimegah Securities analyst Fakhrul Fulvian said.
Capital flows for Indonesia will rise if the government is willing to add more global bonds to its funding, the analyst added.
Elsewhere in the region, the Singapore dollar SGD=, Philippine peso PHP= and the Malaysian ringgit MYR= all traded flat against a broadly stable U.S. dollar. FRX/
Equities were broadly mixed with South Korean stocks .KS11 gaining 1.1% on dip-buying after two sessions of declines. Singapore stocks .STI retreated 0.4% and those in the Philippines .PSI fell 0.5%.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS traded near a two-week low.
HIGHLIGHTS:
** Honda, Nissan move to deepen ties, sources say, including possible merger
** Malaysia's November exports rise 4.1% y/y, above forecast
** BOJ leaning toward keeping rates steady on Thursday, according to sources
Asian stocks and currencies at 0803 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | -0.07 | -8.15 | .N225 | -0.72 | 16.79 |
China | CNY=CFXS | -0.02 | -2.58 | .SSEC | 0.62 | 13.69 |
India | INR=IN | -0.05 | -2.03 | .NSEI | -0.47 | 11.46 |
Indonesia | IDR= | -0.16 | -4.29 | .JKSE | -0.34 | -1.92 |
Malaysia | MYR= | -0.02 | +2.78 | .KLSE | 0.18 | 10.00 |
Philippines | PHP= | +0.02 | -6.11 | .PSI | -0.50 | 0.30 |
S.Korea | KRW=KFTC | -0.01 | -10.38 | .KS11 | 1.12 | -6.43 |
Singapore | SGD= | -0.07 | -2.33 | .STI | -0.42 | 16.77 |
Taiwan | TWD=TP | +0.10 | -5.38 | .TWII | 0.65 | 29.21 |
Thailand | THB=TH | -0.38 | -0.34 | .SETI | 0.21 | -1.22 |
Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Rajasik Mukherjee and Himanshi Akhand in Bengaluru; Editing by Stephen Coates and Mrigank Dhaniwala
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