MOST Asian currencies and stock markets slipped on Tuesday, with traders waiting to see if the U.S. central bank would slow the pace of its interest rate hikes as inflation and the economy show signs of losing momentum.
Indonesia's rupiah, which has gained nearly 4% so far this month, fell 0.1% to hover near its lowest level since last September.
The Chinese yuan and Malaysia's ringgit eased 0.1% each. Philippine stocks led the declines in the region as they dropped 3.3% in their sharpest fall since Dec. 2 last year.
"Most Asian FX seem to be in a consolidation mode now, following strong gains in January... and ahead of key central banks meetings this week, particularly the U.S. FOMC (Federal Open Market Committee)," said Chidu Narayanan, Asia rates and markets strategist at BNP Paribas.
The U.S. Federal Reserve is widely expected to raise interest rates by 25 basis points on Wednesday - the smallest since the central bank kicked off its tightening cycle 10 months ago with one the same size.
Analysts expect two more quarter-percentage point hikes by mid-2023.
"Post-meeting communication is probably going to emphasise that the Fed is not done in terms of further tightening and (Chair Jerome) Powell will probably still signal that more rate hikes are in the pipeline," said Mitul Kotecha, head of EM strategy at TD Securities.
South Korea's won weakened as much as 0.3%, while stocks in Seoul dropped 1%.
The country's industrial output fell in December more sharply than expected and posted its worst annual performance in over 2-1/2 years, data showed.
Thailand's factory output dropped more than expected in December, as a global slowdown hit demand for Thai exports.
Stocks in Bangkok shed 0.3%, while the baht fell 0.1%. India's rupee weakened 0.3% and shares were trading 0.4% lower on the final day of Adani Enterprises' mega secondary share sale and ahead of the country's federal budget on Wednesday.
In other news, China's economic activity swung back to growth in January after a wave of COVID-19 infections passed through the country faster than expected following Beijing's sudden U-turn on pandemic controls.
** Singapore and other Southeast Asian economies are seeing downgrades to their 2023 growth outlooks because slowing global growth will outweigh the positive impact from China's economic reopening, according to International Monetary Fund economists
** JG Summit down 7.6% and Semirara Mining and Power down 6.2% - top losers on the Philippine benchmark index
** Philippine inflation likely to be within a range of 7.5% to 8.3% in January - Reuters