* Indonesia, Taiwan central bank meetings on Thursday
* Malaysia govt announces $4.87 bln stimulus
* Indonesia's rupiah up 0.4%
March 18 (Reuters) - Indonesia's rupiah led Asia's emerging
currencies higher on Thursday and stocks rallied after the
Federal Reserve pledged to keep interest rates near zero for a
while yet despite an expected rise in inflation.
Stock markets in the Philippines .PSI , South Korea .KS11
and Singapore .STI all climbed around 1%, clinging to the news
that the Fed won't be winding back stimulus despite a stronger
U.S. economic outlook and inflation which is set to eclipse the
central bank's 2% target. However, 10-year Treasury yields US10YT=RR continued to
rise. They were trading at 1.6726%, just shy of a 13-month high
hit before the Fed's announcement, helping the dollar recoup
some of its earlier losses and limiting gains in Asia's
risk-sensitive currencies.
Analysts at DBS view the post-Fed dollar sell-off as
investors trying to make some profit on gains made in the lead
up to the meeting.
Asia's higher-yielding bonds also largely stuck to tight
ranges.
U.S. yields have risen in recent months on expectations that
a faster rebound in the U.S. economy, buoyed by fresh stimulus
and a vaccination programme, could fuel inflation and prompt the
central bank to begin unwinding ultra-loose monetary policy.
But Citi analysts said a general outperformance of the U.S.
economy and higher inflation, among other factors, "may keep
(the) U.S. curve steep and prevent lasting relief for Asia fixed
income," Citi analysts said.
Central banks in Indonesia and Taiwan are due to hold policy
meetings later on Thursday, with both expected to keep interest
rates steady. Indonesia's rupiah IDR= advanced 0.4% on the dollar and
stocks .JKSE were up 0.9% after the Fed overnight and ahead of
Bank Indonesia's (BI) decision, due at around 0700 GMT.
Bank Indonesia is expected to keep its 7-day reverse
repurchase rate IDCBRR=ECI unchanged at a record low of 3.50%,
after a bout of monetary stimulus during the pandemic and as the
currency has recently come under pressure. BI has slashed rates
by 150 basis points over six cuts since the pandemic started.
"BI is worth watching for the rhetoric given that it may be
more grudgingly on hold," Mizuho Bank said of BI, that has
prioritised currency stability.
Stocks in Taiwan .TWII climbed close to 1% and the dollar
TWD=TP was marginally higher.
The rising local dollar, which has strengthened over 6% in
the year, has become a source of concern for the export-reliant
economy. Taiwan's economic growth last year was supported by
global demand for its tech products from an increasing number of
people working from home during the pandemic.
Taiwan's central bank governor has also acknowledged the
island may be labelled a currency manipulator by the United
States, having met Washington's three main criteria for such a
decision. Last week, data showed a large spike in currency
intervention spending last year. In Malaysia, stocks .KLSE were up half a percent and the
ringgit MYR= nearly a third of a percent, after the government
unveiled a fresh round of stimulus on Wednesday, totalling 20
billion ringgit ($4.87 billion).
** Thailand's 10-year government bond yields down 4 basis
points to 1.8%
** Malaysia to sell 4.5 bln ringgit government bonds
** Jardine Matheson Holdings Ltd JARD.SI , Genting
Singapore Ltd GENS.SI and CapitaLand Integrated Commercial
Trust CMLT.SI led gains in Singapore
Asia stock indexes and currencies at 0347 GMT
COUNTRY FX RIC FX FX INDEX STOCKS STOCKS
DAILY % YTD % DAILY % YTD %
Japan JPY= -0.01 -5.15 .N225 1.63 10.78
China CNY=CFXS +0.16 +0.52 .SSEC 0.55 -0.25
India INR=IN +0.00 +0.72 .NSEI 0.00 5.29
Indonesia IDR= +0.38 -2.30 .JKSE 0.85 5.88
Malaysia MYR= +0.29 -2.12 .KLSE 0.49 0.35
Philippines PHP= -0.10 -1.25 .PSI 1.39 -6.74
S.Korea KRW=KFTC +0.52 -3.39 .KS11 0.98 7.09
Singapore SGD= -0.10 -1.51 .STI 1.19 10.65
Taiwan TWD=TP +0.05 +0.69 .TWII 0.75 10.90
Thailand THB=TH +0.13 -2.51 .SETI 0.81 8.98
($1 = 4.1050 ringgit)