Most Asian currencies, stocks rise ahead of Fed decision
Bank of Japan raises short-term rates
Thai baht, South Korea won lead gains
Inflation data awaited from S.Korea, Indonesia
Updates at 0645 GMT
By Archishma Iyer
July 31 (Reuters) -Emerging Asian currencies and stocks rose on Wednesday, with investors awaiting the US FederalReserve's policy decision later in the day, while the yen was choppy after the Bank of Japanraised rates for the second time since 2007.
The South Korean won KRW=KFTC and the Thai baht THB=TH gained themost among currencies, rising 0.6% and 0.5%, respectively.
Investors now awaitthe Fed's decision, with markets expecting the central bankto stay pat on interest rates. However, any commentaryon a possible ratecut in September will keenly eyed.
Market participants have largely priced in a September rate cut, with more than 87% odds of a 25 basis-point reduction, according to the CME FedWatch tool.
The Bank of Japan raised its short-term interest rate target to 0.25% and unveiled a detailed quantitative tightening plan on Wednesday, pushing theyen to its highest in a week, before the currency pared all of its gains.
"The elephant in the room is JPY, which has been highly volatile. The sharp recent appreciation suggests that many currency traders made correct bets on the BoJ’s rate move today," Duncan Wrigley, Chief China+ economist at Pantheon Macroeconomics, said in a note.
Other Asian currencies such as the Singapore dollar SGD=, the Philippines peso PHP= and the Malaysian ringgit MYR= traded flat to 0.3% higher.
The Fed cutting rates could pave the way for Asian central banks to start easing their own policy stances, even though thismay not be as beneficial for emerging Asia, saidJonathan Koh, an economist and FX analyst atStandard Chartered.
"I think some (Asian) central banks could cut interest rates following the Fed, so in a way the interest rate differential may not actually narrow in favour of Asian currencies but usually when the Fed cuts, it may lead to a risk-on sentiment for EM Asia currencies," Koh said.
A wider interest rate differential is usually beneficial for riskier emerging market assets as investors will seek higher returns, boosting capital inflows.
Investors alsoawait inflation data from Indonesia and South Korea this week, to gauge the stance of their respective central banks oninterest rates.
Both central banks had held ratesearlier in the month, citing more economic evidence was needed to pivot to rate cuts.
Most emerging Asian equities rose, with Chinese stocks .SSEC advancing about 1.9%, as investors cheered a Politburo meeting that emphasised the need for a boost in consumption.
Bourses in Thailand .SETI, Philippines .PSI, Malaysia .KLSE and Indonesia .JKSE traded higher between 0.1%and 0.8%.
HIGHLIGHTS:
** Reserve Bank of India to hold rates in August, first cut in Q4
** Philippines central banksees July inflation rate at 4.0% to 4.8%
** China's July factory activity shrinks, services grow more slowly
Asian stocks and currencies at 0645 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | +0.00 | -7.66 | .N225 | 1.49 | 16.84 |
China | CNY=CFXS | +0.20 | -1.84 | .SSEC | 1.89 | -1.38 |
India | INR=IN | -0.01 | -0.63 | .NSEI | 0.30 | 14.73 |
Indonesia | IDR= | +0.06 | -5.47 | .JKSE | 0.07 | -0.36 |
Malaysia | MYR= | +0.33 | -0.33 | .KLSE | 0.48 | 11.34 |
Philippines | PHP= | +0.25 | -5.21 | .PSI | 0.23 | 2.66 |
S.Korea | KRW=KFTC | +0.59 | -6.43 | .KS11 | 1.19 | 4.35 |
Singapore | SGD= | +0.03 | -1.69 | .STI | 0.34 | 6.58 |
Taiwan | TWD=TP | -0.15 | -6.57 | .TWII | -0.11 | 23.81 |
Thailand | THB=TH | +0.49 | -4.25 | .SETI | 0.77 | -6.90 |
Reporting by Archishma Iyer in Bengaluru; Editing by Subhranshu Sahu and Sonia Cheema
Mga Kaugnay na Asset
Pinakabagong Balita
Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.
Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.
Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.