Indonesia's currency pared some gains while the local benchmark index fell further on Wednesday after data showed the country's consumption remains tepid, while other Asian currencies were muted on jitters from an escalating U.S.-China trade war.
The Indonesian rupiah, which gained up to 0.3% on Wednesday, dropped to last trade 0.2% higher. Stocks in Jakarta were trading 0.7% lower after the economic data.
The benchmark had lost 0.5% earlier. Data showed Southeast Asia's largest economy expanded at a steady 5% pace in 2024, reflecting lacklustre consumption and lagging new President Subianto's ambition of 8% growth.
"We expect growth to slow on our measure of activity, as the impact of lower commodity prices and subdued global demand offsets the boost from lower interest rates," said Gareth Leather, senior Asia economist at Capital Economics.
Other currencies were mostly subdued, with the Singapore dollar and Philippine peso trading 0.1% lower. China's announcement of retaliatory tariffs against the U.S. on Tuesday reignited fears of a new trade war, following a brief respite from the pause on tariffs on Canada and Mexico.
"China's response leaves the door open for a potential deal between Washington and Beijing to avert a more damaging, broader trade war," said analysts at Bank of Singapore.
The Chinese onshore yuan was 0.6% lower while stocks fell 0.7%.
"We admit that we are in the more cautious camp that sees the additional 10% tariff rate as a starting point," Maybank analysts said.
"There is still a possibility that talks could reach an impasse and as Trump had threatened, he may choose to escalate by raising the tariffs from the current additional 10%."
The Philippine peso dropped 0.1% as the country braces for a potential 25-basis-point rate cut following the central bank's Feb. 13 policy meeting.
Shares in emerging Asia were mostly upbeat, with the Philippine benchmark set for a third straight day of gains.
Equities in Kuala Lumpur gained up to 0.7%, marking their biggest intraday gain since Jan. 24, driven by a 7% jump in construction major Gamuda.
Malaysia's index has "shown a strong recovery in the construction sector, but caution remains as the rebound could be a false breakout following the recent sharp correction," Maybank analysts said.
Shares in Taipei and Seoul added 1.6% and 1.1%, respectively. South Korean shares rallied as e-commerce firms gained on hopes around artificial intelligence.
HIGHLIGHTS:
** Indonesia's economy expands by 5% in 2024
** Philippine annual inflation at 2.9% in Jan - Reuters
