ASIAN currencies and stock markets advanced on Friday, as investor focus shifted from worries about the global banking system to key U.S. inflation data due later in the day, expected to give a fresh reading on the Fed's monetary policy plans.
Most currencies in the region were also set to end the quarter on a positive note, with Indonesia's rupiah on track to record a 3.8% rise.
The rupiah strengthened 0.5% on Friday to hit a near two-month high.
"In the near term, the rupiah could get more of a lift if there is further dollar weakness. There could also be more foreign buying into Indo bonds if the Fed keeps softening its stance," Maybank analysts said in a note.
Analysts at ANZ said high coal prices have helped maintain positive export growth in Indonesia, adding that the rupiah remains their preferred high-yield currency in the region.
Malaysia's ringgit and the South Korean won rose 0.3% each. The Indian rupee appreciated 0.2% and was set to snap five quarterly losses.
Weakness in the dollar, which is tracking towards a second consecutive quarterly loss, boosted investors' appetite for riskier Asian assets.
Markets are awaiting the February reading for the personal consumption expenditures price index (PCE) from the U.S., the metric by which the Fed measures its 2% inflation target, due later in the day.
"Big focus on core PCE where consensus expects it to decelerate on sequential terms. A faster deceleration should reinforce the disinflation story and support the tamer Fed profile narrative. This can further boost risk sentiments," OCBC analysts wrote in a note.
Meanwhile, Philippine's central bank said annual inflation in March was expected to come in between 7.4% and 8.2%, ahead of the release of the data on April 5.
The Bangko Sentral ng Pilipinas last week raised its benchmark interest rate by 25 basis points and said its next policy move would depend largely on how consumer prices will behave in the coming months.
Manila's stock market declined 1.3% to be the only outlier in the region. Equities in
Shanghai edged 0.2% higher. The yuan rose 0.1%, following better-than-expected manufacturing data and upbeat official comments on the country's economic outlook.
Stocks in Seoul climbed 0.9% and were set for their biggest quarterly gain in more than two years. India shares jumped 0.9% but the benchmark was down 4.8% for the quarter.
HIGHLIGHTS:
** Thailand's economy is expected to grow by 3.6% this year, up from 2.6% last year, according to the World Bank
** Japan's government said it plans to restrict exports of 23 types of semiconductor manufacturing equipment, aligning its technology trade controls with a U.S. push to curb China's ability to make advanced chips - Reuters
