MOST Asian currencies and stocks rose on Monday, as investors prepared themselves for a week filled with key inflation data and central bank meetings as well as an annual parliamentary session in China.
Optimism over artificial intelligence-linked industries that has swept up global markets in recent weeks drove shares in Taiwan up as much as 2.1% to an all-time high and South Korea up to 1.3% higher.
Stocks in the Philippines climbed as much as 1.5% to their highest levels since February 2023. In currencies, the Philippine peso and Taiwanese dollar strengthened 0.2% and 0.3%, respectively.
Market participants are looking out for policy signals from an annual meeting of China's parliament beginning on Tuesday where it is expected to unveil moderate stimulus plans to stabilise growth.
"The market could become more optimistic about China's economic recovery if the government does emphasize that it will continue to stimulate the economy," said Poon Panichpibool, a markets strategist at Krung Thai Bank.
"If the government maintains an ambitious growth target, it could show that it will do whatever it takes to achieve such goals which could be quite positive for the market at least in the near term."
A string of recent data has pointed to a challenging economic outlook for China, Southeast Asia's largest trading partner, adding pressure on policymakers to roll out fresh stimulus measures.
The country's inflation data for February due later this week is also being keenly awaited by investors after a steep fall in consumer prices in January reignited deflationary concerns. The Chinese yuan was largely flat, while equities edged 0.2% higher.
Elsewhere, Bank Negara Malaysia (BNM) will announce its interest rate decision on Thursday where analysts expect the central bank to stand pat.
"Since MYR has been weakened somewhat lately, I think the BNM will keep their tones to be quite neutral in order to prevent further weakness in the MYR," Panichpibool said referring to the Malaysian ringgit.
The ringgit jumped as much as 0.6% to hit its highest level in a month.
The currency has been recovering losses but is still down 2.9% for this year, having slumped to its lowest level since 1998 in February.
A slew of inflation data from Thailand, Philippines and South Korea are also on investors' radar this week.
Vishnu Varathan, head of economics and strategy for Asia at Mizuho Bank, wrote that headline deflation for February is likely to persist in Thailand.
However, "deflation remains no cause for the BoT (Bank of Thailand) to ease with the Governor re-iterating that rate cuts are no panacea for the economy's structural woes."
Thailand's headline inflation had fallen for a fourth consecutive month in January.
HIGHLIGHTS:
** Japan's Nikkei breaches 40,000 level for first time as tech stocks soar
** G20 optimism on global outlook gives BOJ impetus for early stimulus exit
** Moody's raises India's 2024 GDP forecast sharply - Reuters
