JAKARTA (Reuters): Most Asian stock markets extended gains on Tuesday on the back of renewed bets for US rate cuts after last week's cooler-than-expected jobs data, while the region's currencies were subdued as the dollar ticked higher.
The Indonesian rupiah fell 0.2%, losing the ground it gained on Monday after data showed the country's economy in the January-March period grew at its fastest pace in three quarters.
The Philippine peso inched 0.1% lower after country's annual inflation increased for a third straight month in April, backing the central bank's recent decisions to keep monetary policy restrictive.
Regional markets are still cautious about the future path of US interest rates as they have not seen a strengthening in Asian currencies even with US yields falling, said Lloyd Chan, senior currency analyst at MUFG Bank.
"The dollar is still attractive. It has a relatively higher carry compared to many Asian currencies, and the rate differentials is in favour of the US. and continues to weigh on the (regional) currencies," Chan said.
Thailand's baht and the Taiwanese dollar each fell by 0.2%. Taiwan is scheduled to report its April inflation numbers later on Tuesday. Bucking the regional trend, the South Korean won was 0.2% higher.
Meanwhile, Asian stocks rose further on optimism from the Federal Reserve hinting at a dovish bias after last week's slower-than-expected job growth, which reinforced bets on rate cuts later in the year.
Interest rates markets price in at least one U.S. rate cut this year, in November. FEDWATCH MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2%.
South Korean stocks surged as much as 2.2% after returning from a holiday on Monday, tracking Wall Street gains overnight. Singapore stocks rose as much as 0.3%, while Malaysian shares gained 0.8%, touching a fresh two-year high.
Market participants now await Malaysia's key rate decision on Thursday. Stocks in Taiwan rose as much as 0.8%, while Thailand shares reached their highest level in four weeks with a 1.1% jump.
Philippine stocks were 0.2% lower, while stocks in Indonesia edged 0.1% lower after rising as much as 0.3% in early trade.
Meanwhile, the yen weakened 0.4%, after last week's gains on suspected intervention from Japanese authorities to stop a sharp slide in the currency. - Reuters
