*
S. Korean won hits near 2-weeks high
*
China yuan and stocks slip after modest growth target
*
Philippine, S. Korean stocks lead gains
*
U.S. payrolls data in focus, due on Friday
By Roushni Nair March 6 (Reuters) - Most Asian currencies strengthened on Monday against a weak dollar, while China's modest growth target and U.S. Federal Reserve Chair Jerome Powell's looming testimony prompted investors to turn cautious. The South Korean won and the Indian rupee led the gains in the region. The rupee strengthened 0.2% to hit its highest level since Feb. 2, while the S. Korean won and Malaysian ringgit appreciated 0.5% and 0.2%, respectively.
The Philippine peso and Singapore dollar were flat.
China, Southeast Asia's biggest trading partner, set a modest economic growth target of around 5% for 2023. It was at the low end of expectations, as policy sources had recently told Reuters that a range as high as 6% could be set. The underwhelming target came despite statements from officials suggesting that the world's second-biggest economy is "steadily improving" thanks to the relaxation of COVID-19 control measures and policies to revive the country's dwindling property sector. "But, with China moving to COVID-19 endemicity and fewer resources to be spent on testing and virus containment, we believe the effectiveness of its fiscal and monetary policy will be improved despite not announcing a more expansionary policy," market analysts at UOB said in a note.
Separately, a slew of economic data in the U.S. rekindled market fears that the Fed will resort to aggressive interest rate hikes, with the spotlight now on the February jobs report due on Friday. Investors also await Powell's testimony to Congress on Tuesday and Wednesday for an update on the central bank's policy outlook.
Even as recent projections suggested a terminal rate of 5.1% this year against the current Fed target range of 4.50%-4.75%, the market is currently pricing in over 5.4%, Alvin Tan, head of Asia FX strategy at RBC Capital Markets said, adding that markets could be volatile this week. "Powell's message is going to be consistent with what the market expects, the big question, however, is will he want to move the market even more than that."
The dollar index , which measures the U.S. currency against six major peers, was 0.182% lower at 104.420.
Most stock markets in the region tracked Wall Street higher, with equities in Manila and Mumbai advancing 1.12% and 1.03%, respectively. Stocks in Jakarta and Kuala Lumpur were largely unchanged.
Shares in Beijing dipped 0.14% and were the only outlier in the region.
Stocks in Seoul added 1.3% after consumer inflation in February hit its slowest pace in 10 months, bolstering views that the central bank is done with its current policy tightening cycle after it held rates steady last month.
HIGHLIGHTS:
** Indonesian 10-year benchmark yields fall 1.1 basis points
to 6.971%
** Markets in Thailand were closed for a public holiday
** Indonesia's inflation to stay above 5% in first half
-c.bank chief
Asia stock indexes and currencies
at 0633 GMT
COUNTRY FX RIC FX FX INDEX STOCKS STOCKS
DAILY % YTD % DAILY YTD %
%
Japan +0.00 -3.50 1.11 9.80
China <CNY=CFXS -0.20 -0.22 -0.20 7.53
>
India +0.28 +1.21 0.98 -1.87
Indonesi -0.07 +1.70 0.02 -0.52
a
Malaysia +0.16 -1.48 0.09 -2.71
Philippi -0.15 +1.53 1.23 2.60
nes
S.Korea <KRW=KFTC +0.36 -2.50 1.26 10.12
>
Singapor -0.11 -0.39 0.28 -0.31
e
Taiwan +0.20 +0.47 0.99 11.50
Thailand 0.00 +0.30 0.00 -3.70
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic: World FX rates Asian stock markets ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Roushni Nair in Bengaluru; editing by Eileen
Soreng)
