MOST equity markets in emerging Asia advanced on Friday, with Singapore climbing to a record high, as investors scaled back bets on a September U.S. rate hike following comments from a top Federal Reserve official.
An MSCI gauge of EM Asia stocks advanced 1.4% and was headed for its best session in seven, with tech-heavy South Korea and Taiwan up as much as 1.6%.
Singapore's Straits Times Index rose as much as 0.9% to a record 5,807.16 points, led by blue-chip banks. The index was up 1.9% for the week, set for its best week since early July. That helped the MSCI ASEAN index post a seven-session high and rise 1% so far in the week.
In the Philippines, stocks slipped 0.2% after data showed annual inflation slowed for the fourth straight month in August. The benchmark, however, was up 2.2% for the week and on track for its best week since mid-June.
Global stocks advanced, bonds rallied and the U.S. dollar slipped after Fed Governor Christopher Waller signalled support for keeping interest rates unchanged if inflation continued to ease.
Markets are pricing in roughly a 50% chance of a Fed rate hike later this month, down from about 63% a day earlier, according to the CME FedWatch tool.
Expectations of a Fed rate hike have moderated ahead of key U.S. inflation data, while the yen's appreciation has weakened the dollar and helped Asian currencies recover some lost ground, said DBS economist Radhika Rao.
"Risks nonetheless remain two-sided, as any renewed U.S.-Iran kinetic conflict could drive oil prices higher and weigh on Asian assets anew," Rao said.
A softer U.S. dollar helped Asian currencies gain ground: the Thai baht touched a five-session high of 32.87 per U.S. dollar, while the Philippine peso found some relief after touching an all-time low earlier in the week.
The rupiah, one of the worst-performing EM currencies this year, appreciated to as much as 17,600 per U.S. dollar, the strongest since late May.
South Korea's won and Taiwan's dollar advanced 0.1% each. The won was up 1.5% for the week, while the Taiwan dollar was on track for its worst week since early July.
Investors now await U.S. nonfarm payrolls data due later in the day for clues on whether the Federal Reserve can afford to keep policy steady despite elevated inflation and oil prices.
HIGHLIGHTS:
* Yield on Indonesia's 10-year bonds at 7.102%
* Chinese AI firm Moonshot files confidentially for Hong Kong IPO, sources say
* South Korea says U.S. companies to invest $2 billion in chip, energy sectors
* Indonesia's global commodities price-setting ambition risks backfiring - Reuters
