Asian equities rose on Wednesday while regional currencies steadied as oil prices tumbled on reports Washington is seeking a month-long ceasefire with Iran, soothing worries about prolonged supply disruptions and bringing some relief to Asia's oil-importing economies.
The MSCI gauge of emerging market equities rose 1.6%, advancing for a second straight session, while MSCI's emerging market currency index was little changed.
Investors took comfort from reports that Washington had sent Tehran a 15-point proposal and was pressing to ease tensions around the Strait of Hormuz, the conduit for about a fifth of global oil shipments.
The fallout from the war has disrupted flights through Middle Eastern Gulf hubs and sent governments across Asia scrambling to secure fuel, conserve energy and shield households from a price shock.
Although oil fell more than 5%, pushing Brent back below $100 a barrel, prices remain elevated after climbing above $110 earlier this week, exacerbating pressure on Asia's net oil importers.
Taiwanese shares rose 2.5%, off earlier highs, while South Korean stocks gained 1.6%, also paring a sharper early rally, as battered tech-heavy markets recovered.
Thai shares advanced 2.3%, while equities in Kuala Lumpur, Singapore, India and Manila gained between 0.4% and 2.2%.
Foreign investors have yanked billions from tech-heavy Taiwan and South Korea since the war began, battering the won and Taiwan dollar, which are down about 4% and 2.3% this month, respectively.
In Thailand, Bangkok said domestic energy prices would now move in line with market forces after dropping its cap on diesel prices.
Maybank analysts said safe passage for a Bangchak cargo through Hormuz suggested Iran was still allowing some coordinated commercial transit, helping ease fears of a full shipping blockade, though the baht was still down 0.6%.
In Indonesia, markets reopened after a five-day holiday with the rupiah up 0.4%, but still hovering just below the psychologically significant 17,000-per-dollar record level. Bank Indonesia has tightened some foreign-exchange rules and pledged to support the currency.
The Philippine peso was down 0.3% after marking record lows this week, even as President Ferdinand Marcos Jr said the country had more than 45 days of oil supply after declaring a state of energy emergency.
The Indian rupee slipped 0.1% after hitting a record low earlier this week, with traders saying likely central bank intervention helped meet heavy dollar demand.
HIGHLIGHTS:
** BOJ debated need for more rate hikes - January minutes show
** Philippines warns oil price hike could send inflation soaring - Reuters
