*
RBI raises repo rate by 25 bps
*
S.Korea shares firm over 1%
*
Peso strengthens as much as 0.7%
By Himanshi Akhand
Feb 8 (Reuters) - Most emerging Asian currencies and
equities firmed on Wednesday, after less-hawkish-than-feared
comments from U.S. Federal Reserve Chair Jerome Powell boosted
risk appetite and raised hopes the Fed may soon ease monetary
policy.
The peso firmed as much as 0.7%, and the Indonesian
rupiah appreciated 0.2%.
The Philippines central bank governor Felipe Medalla said
inflation "most likely" peaked in January but warned another
surprise supply shock could not be ruled out. Data on Tuesday
showed annual inflation in the country rose by far more than
expected in January to reach a 14-year high.
The U.S. dollar eased on Wednesday after Fed's Powell
acknowledged that interest rates might need to move higher than
expected if economic conditions remained strong but said that he
felt a process of disinflation was underway. In a question-and-answer session before the Economic Club of
Washington, Powell reiterated that disinflation has begun but
warned that Friday's blockbuster jobs report showed why the
battle against inflation will "take quite a bit of time."
"It appears that markets had a bout of selective hearing. In
particular, Powell's allusion to 'dis-inflationary process ...
has begun' dominated the takeaway for markets, serving as a
selective excuse to extend Fed pivot rallies," Vishnu Varathan,
head, economics & strategy at Mizuho Bank, wrote in a note.
Most equities in the region were also higher, with stocks in
Manila , Singapore and Seoul each adding
0.8%, 0.2% and 1.3%.
Meanwhile, the Reserve Bank of India (RBI) hiked its key
repo rate by a quarter percentage point on Wednesday as expected
but surprised markets by leaving the door open to more
tightening, saying core inflation remained high.
The Indian rupee was up 0.1% and the benchmark
Nifty gained 0.8%.
"It seems reasonable to conclude that until measures of
inflation present less of a threat, by falling below 6% and
remaining there for a couple of months, we can't rule out
further rate hikes," Robert Carnell, regional head of research,
Asia Pacific at ING, wrote in a note.
In Malaysia, the ringgit added 0.1% while equities eased 0.5%.
Malaysia's gross domestic product (GDP) data is scheduled
for release on Friday. Analysts at Barclays expect
fourth-quarter GDP growth at 7.1% year-on-year and see another
25 basis point rate hike in March.
HIGHLIGHTS
** The RBI will allow banks to borrow and lend government
bonds in a move that could add depth and liquidity to the
market, the central bank chief said
** Taiwan's exports fall for a fifth straight month in
January due to a deteriorating global economy and factory
closures during the long Lunar New Year holiday
Asia stock indexes and currencies at
0714 GMT
COUNTRY FX RIC FX FX INDEX STOCKS STOCKS
DAILY YTD % DAILY YTD %
% %
Japan -0.18 -0.14 -0.29 5.79
China +0.03 +1.70 -0.49 4.63
India +0.06 +0.08 0.66 -1.48
Indonesia +0.20 +3.01 -0.13 1.10
Malaysia +0.02 +2.33 -0.33 -1.60
Philippines +0.51 +1.44 0.61 5.43
S.Korea -0.38 +0.35 1.30 11.06
Singapore -0.08 +1.10 0.19 4.18
Taiwan -0.06 +2.16 1.41 10.47
Thailand -0.09 +3.01 -0.24 0.47
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic: World FX rates Asian stock markets ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Himanshi Akhand in Bengaluru; Editing by Janane
Venkatraman)
