Asian stocks climb on Wall Street boost, currencies waver against strong dollar
Reuters - Emerging Asian stock markets advanced on Wednesday, mirroring Wall Street's overnight gains, while currencies were tepid after strong economic data buoyed the dollar, despite lingering concerns about the U.S. fiscal health and trade policies. Philippine stocks jumped 0.7%, while the Singapore market climbed 0.6% to a two-week peak. South Korean shares ended up 1.3% at a more than three-month closing high. U.S. President Donald Trump backed away over the weekend from his threat to slap 50% tariffs on imports from the European Union next month, agreeing to extend the deadline until July 9. U.S. consumer confidence data coming in much better-than-expected added to the optimism, helping stocks on Wall Street surge overnight as investors returned from a three-day extended weekend. The dollar index, which measures the U.S. currency against six rivals, also inched up 0.2%, adding to Tuesday's 0.6% advance. Positive developments from across the world, including the progress in the U.S.–EU talks and speculation that the Japanese government could adjust its level of bond issuance, seem to have driven the demand for U.S. assets, Maybank analysts said. "The gains in U.S. assets came on the back of strong economic data overnight, which some market concerns about the country's fiscal outlook," Poon Panichpibool, a market strategist at Krung Thai Bank, said.
"However, it could just be a brief moment of rebound," he said, adding that fiscal concerns could flare up depending on how the U.S. Senate votes on Trump's tax-cut bill that is expected to add to the debt pile in the world's largest economy. Emerging Asian currencies, which have benefited from broader weakness in the greenback this month, were subdued on Wednesday. The Indian rupee weakened 0.2%, while the Singapore dollar appreciated marginally. The South Korean won was largely flat at 1,376.40. Investors are now focused on the Bank of Korea's monetary policy decision on Thursday, where the central bank is expected to lower its key rate by 25 basis points after economic activity contracted last quarter and April inflation came closer to the central bank's target. "Board members are likely to focus on tariff impact on growth, U.S.-Korea trade talks, and recent KRW appreciation," analysts at BofA Global Research said. In Malaysia, the ringgit and equities edged up 0.1% each. Malaysia's Economy Minister Rafizi Ramli said he had submitted his resignation, after losing a contest for the deputy presidency of the premier's political party. HIGHLIGHTS: ** ASEAN leaders agree tariff deals with the U.S. should not harm fellow members ** U.S. trade deal could boost Indian exports, government report says ** Demand at Japan's 40-year bond auction sinks as fiscal doubts prevail Asia stock indexes and currencies at 0724 GMT COUNTRY FX RIC FX DAILY FX YTD % INDEX STOCKS STOCKS % DAILY YTD % % Japan +0.03 +8.94 0.00 -5.44 China India -0.24 +0.09 -0.13 4.86 Indonesi -0.09 -1.20 0.04 1.72 a Malaysia +0.12 +5.63 0.09 -6.99 Philippi -0.06 +4.56 0.64 -1.58 nes S.Korea Singapor +0.00 +5.95 0.44 3.32 e Taiwan +0.19 +9.65 0.10 -7.28 Thailand +0.14 +4.88 0.21 -16.74
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