Asian FX, equities mixed after BoJ policy surprise

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Emerging Asian currencies and

equities were mixed on Wednesday, with the rupiah gaining and

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the baht retreating after the Bank of Japan (BOJ), in a surprise

move, stuck to its ultra-easy monetary policy.

The BOJ maintained ultra-low interest rates, ending days of

market speculation that the central bank might phase out its

massive stimulus program in the wake of rising inflationary

pressures.

“While the Japanese yen is not particularly correlated with

Asian currencies, the U.S. dollar may benefit further from BOJ

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inaction, which in turn could result in more dollar strength

compared to Asian currencies in the short term,” said Mitul

Kotecha, head of EM strategy at TD Securities.

The Thai baht weakened 0.3%, the Singapore dollar

edged 0.2% lower, while the South Korean won

and Taiwan’s dollar were largely unmoved.

On the other hand, the Indonesian rupiah appreciated

0.7% after weakening as much as 0.8% on Tuesday, while the

Philippine peso rose 0.5%.

“With the Lunar New Year long holiday coming up in Asia next

week, markets are likely to focus on taking profit/squaring

positions as liquidity in Asia is expected to thin next week,”

said Christopher Wong, a currency strategist at OCBC.

Elsewhere in Asia, Malaysia’s ringgit remained

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largely unmoved. Bank Negara Malaysia (BNM), the country’s

central bank, is expected to deliver its fifth consecutive

quarter-percentage-point hike on Thursday, a Reuters poll found.

Also, Malaysian exports grew at a slower-than-expected pace

in December.

“The trade surplus widened in December despite another

sequential decline in exports. While tech exports contracted,

their shipment levels continued to hold up,” said Brain Tan, an

analyst at Barclays Bank.

Meanwhile, Indonesia’s central bank is also expected to

deliver another 25 basis points rate hike on Thursday.

Equities in the region were also mixed on the day, with

Jakarta stocks dropping 0.4% after a four-day rally.

Singapore stocks were up 0.2% and Philippine

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shares added 0.7%. Stocks in Shanghai were unchanged.

HIGHLIGHTS:

** Indonesia approves $3.35 bln revised development plan for

Eni’s Merakes fields

** FOREX-Yen sinks after BOJ sticks to ultra-easy policy

** China’s property sector shrinks 5.1% in 2022 – NBS

Asia stock indexes and

currencies at 0602 GMT

COUNTRY FX RIC FX FX INDE STOCKS STOCKS

DAILY % YTD % X DAILY YTD %

%

Japan -1.94 +0.34 <.n2>

China EC>

India +0.15 +1.32 <.ns ei>

Indonesia +0.66 +3.35 <.jk se>

Malaysia -0.02 +1.71 <.kl se>

Philippine +0.49 +1.90 <.ps s i>

S.Korea 11>

Singapore -0.17 +1.32 <.st i>

Taiwan -0.01 +1.29 <.tw ii>

Thailand -0.32 +4.53 <.se ti>

(Reporting by Jaskiran Singh in Bengaluru; Editing by Savio

D’Souza)