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EMERGING MARKETS-Indonesia's rupiah leads Asian currencies lower as U.S. Treasury yields rise

Published 03/04/2021, 01:29 PM
Updated 03/04/2021, 01:30 PM
© Reuters.

* Malaysia central bank decision due later
* Malaysia expected to leave rates unchanged at 1.75%
* Taiwan stocks fall 2%; China, South Korea down 1.6%

By Nikhil Nainan
March 4 (Reuters) - Indonesia's rupiah led other Asian
emerging currencies lower on Thursday as the dollar was buoyed
by higher U.S. Treasury yields, while stock markets in China,
South Korea and Taiwan fell more than 1.5%.
Global bond yields have risen in recent weeks, with markets
concerned central bankers could tighten the monetary spigot as
the global economy rebounds from the onslaught of the COVID-19
pandemic. That prospect has weighed on global stock markets.
Stocks in Jakarta .JKSE fell 0.8%, while in Manila .PSI
and Bangkok .SETI they were down around half a percent.
Equities in Taiwan .TWII , China .SSEC and South Korea
.KS11 were the worst performers.
Benchmark U.S. 10 year yields US10YT=RR edged higher in
Asia trade to 1.48%. That was off the one-year highs of 1.61%
seen last week, when global stock markets sold off sharply.
"While not quite reaching the recent high..., we think that
inflation worries are getting entrenched," analysts at DBS said.
But they said Asian markets were less vulnerable to global
market volatility than they were in 2013, when bond investors
threw a "tantrum" after hints the U.S. Federal Reserve might
slow the money-printing presses. DBS analysts were recommending "extending Asian credit
exposure on dips" as a result.
Malaysia's ringgit MYR= dipped 0.1% ahead of a monetary
policy meeting. Eleven of the 15 economists polled by Reuters
expect the central bank to keep its key interest rate at 1.75%,
with four forecasting a rate cut. Stocks in Kuala Lumpur .KLSE were down 0.2%, while 10-year
bond yields MY10YT=RR were little changed at 3.096%.
Indonesia's rupiah IDR= - which backs some of the
highest-yielding emerging market debt - fell 0.3%.
China's annual parliamentary gathering will take place on
Friday, with the government expected to set the country's
macroeconomic policy targets at the meeting.

HIGHLIGHTS:
** Indonesian 10-year benchmark yields up 4.39 basis points
at 6.613%
** Malaysia's 3-year benchmark yield is up 1.5 basis points
at 2.003%
** Singapore shares .STI edged higher, led by Jardine
Matheson Holdings Ltd JARD.SI and top bank DBS Group Holdings
Ltd DBSM.SI

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Asia stock indexes and currencies at 0347 GMT
COUNTRY FX RIC FX FX INDEX STOCKS STOCKS
DAILY % YTD % DAILY % YTD %
Japan JPY= -0.07 -3.57 .N225 -1.88 5.69
China CNY=CFXS -0.04 +0.89 .SSEC -1.58 1.36
India INR=IN +0.00 +0.49 .NSEI 0.00 9.04
Indonesia IDR= -0.32 -1.72 .JKSE -0.79 5.81
Malaysia MYR= -0.10 -0.81 .KLSE -0.20 -2.58
Philippines PHP= -0.08 -1.13 .PSI -0.40 -3.15
S.Korea KRW=KFTC -0.57 -3.59 .KS11 -1.62 5.55
Singapore SGD= -0.02 -0.88 .STI 0.30 5.82
Taiwan TWD=TP +1.61 +2.42 .TWII -2.01 7.83
Thailand THB=TH -0.23 -1.35 .SETI -0.53 5.93

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