*
Indonesia Q1 GDP +5.03% y/y vs 4.95% in poll; shares down
1.4%
*
Philippine April CPI rise slowest since Aug 2022; peso up
0.3%
*
Markets in Thailand and South Korea closed
By Harish Sridharan May 5 (Reuters) - Asian currencies strengthened against a weaker dollar on Friday, while shares declined as investor jitters persisted amid fresh turmoil in the U.S. banking sector. Much like the rest of the week, shares of U.S. regional banks sank overnight on fears of a crisis in the financial sector. The dollar index was last down 0.138% at 101.120. Malaysia's ringgit rose 0.3% after returning from a public holiday, buoyed by Bank Negara Malaysia's unexpected interest rate hike late on Wednesday and in reaction to the Fed's policy statement, signalling it may pause further rate hikes. Most other currencies also rose. Stocks in Jakarta declined 1.4% - on track for their worst sessions since mid-March, even as Indonesia's economy grew faster-than-expected in the first quarter. The country's gross domestic product (GDP) rose 5.03%, versus a 4.95% expansion that was predicted in a Reuters poll.
The rupiah was flat. The yield on the 10-year benchmark bond slipped further to 6.402% - its lowest level since January 2022. "We think the economy is set to struggle over the coming quarters. (But) on the plus side, the sharp fall in inflation.. will boost the purchasing power of households," said Gareth Leather, senior Asia economist at Capital Economics. Bank Indonesia has paused its rate-tightening cycle in the past three months and some economists expect it to keep rates unchanged for the rest of the year. Central banks in Asia have taken different monetary policy paths in recent months as they deal with diverse inflation and economic growth factors. In the Philippines, Bangko Sentral ng Pilipinas (BSP) has raised its benchmark interest rate to 6.25% in its fight against inflation.
But with inflation slowing, the central bank now has some leeway to pause its 10-month tightening cycle. Annual inflation eased for the third consecutive month in April, and is on track to settle within the government's 2% to 4% target in the fourth quarter. The BSP said that it remains committed to adjusting its monetary policy stance as necessary to prevent further broadening of price pressures. The peso gained 0.3%. "Slowing inflation and a relatively stable currency could be enough to convince Governor (Felipe) Medalla to bring his recent tightening cycle to an end," said Nicholas Mapa, senior economist at ING.
"Today's report increases the chances for a pause from the BSP at the May 18 meeting," he said. China shares were down 0.5%, led by declines in artificial intelligence firms. China's service activity grew for a fourth month in April, a private-sector survey showed. Markets in Thailand, South Korea and Japan were closed on account of public holidays.
HIGHLIGHTS
** Thailand records 8.6 mln foreign tourist arrivals in
Jan-April
** Marcos says U.S. access to Philippines bases not meant
for 'offensive action'
** China's services activity expands as consumers return -
Caixin PMI
Asia stock indexes and currencies at 0628 GMT
COUNTRY FX RIC FX FX INDEX STOCK STOCK
DAILY YTD % S S YTD
% DAILY %
%
Japan +0.08 -2.27 - 11.74
China -0.00 -0.19 -0.47 7.95
India +0.00 +1.12 -0.63 0.20
Indonesia +0.02 +6.09 -1.37 -1.46
Malaysia +0.29 -0.83 0.19 -4.46
Philippines +0.22 +0.76 0.24 2.04
S.Korea - -4.41 - 11.83
Singapore +0.24 +1.13 -0.22 0.33
Taiwan +0.09 +0.23 0.11 10.53
Thailand - +2.35 - -8.11
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Graphic: World FX rates Asian stock markets ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Harish Sridharan in Bengaluru; Editing by Sonia Cheema)
