Philippines leads Asian stocks higher; FX subdued as rates in focus

* Dollar ticks up after a three-session slide

* Asian stocks tail rally on Wall Street

By Riya Sharma

May 18 (Reuters) - Most Asian currencies were largely subdued on Wednesday, as the dollar recovered slightly and a hardened inflation stance by the U.S. Federal Reserve chief piled pressure, while Philippines led the rally among equities.

Shares in Indonesia .JKSE and Taiwan .TWII edged up 1.5% each. South Korea's won KRW=KFTC firmed 0.7%, while most other currencies in the region remained muted.

Philippine central bank's accommodative monetary policy has narrowed and it stands ready to make adjustments should it see any sign of inflation expectations becoming disanchored, its governor said ahead of the monetary authorities' policy meeting on Thursday.

Manila shares .PSI jumped 2% to a near two-week high, while the Philippine peso PHP= was little changed, as markets were already expecting a 25 basis point raise in reverse repurchase facility rate PHCBIR=ECI by Bangko Sentral ng Pilipinas (BSP), according to most economists in a Reuters poll.

The Fed said it will "keep pushing" to tighten U.S. monetary policy until it is clear inflation is receding, adding to fears that the central bank might take a more hawkish approach.

"The U.S. dollar being strong, it's never a good thing for stocks or currencies in emerging markets because a lot of the debt is obviously denominated in the U.S.," said Junvum Kim, a sales trader at Saxo Capital Markets.

The greenback =USD edged higher after a three-session slide, reducing riskier assets' appeal.

Asian markets took the lead from Wall Street's risk-on sentiment, along with some improved sentiment for Chinese tech, IG market strategist Yeap Jun Rong said.

Chinese Vice-Premier Liu He's soothing comments to tech executives on Tuesday, saying the government supported the development of the sector and public listings for technology companies, also lifted sentiment across boards.

"Tencent's results will be closely watched today, coming after JD earnings outperformance overnight, which displayed some resilience to COVID-19 lockdowns (in China)," Jun Rong said.

Emerging Asian bonds saw foreign outflows for a second straight month in April, due to higher U.S. yields and concerns over strict coronavirus lockdowns in China.

"There isn't a lot of offshore capital flowing into (emerging) markets and much of what we are seeing in today's stock rally has to do with relief rally recovering from previous weeks. Whatever money was already in the domestic market, is just being flown into it again," Kim said.

The Indonesian rupiah IDR= , which has fallen nearly 1.3% since crude palm oil shipments were halted on April 29, was down 0.3% to hit its lowest since Nov. 2, 2020.

Shares in Jakarta .JKSE were up 2.2% in tandem, with global equity moves. HIGHLIGHTS: ** U.S. retail sales, which grew strongly in April as consumers bought more motor vehicles amid an improvement in supply and increased spending at restaurants, worked as a catalyst to build on a relief rally globally on Wednesday. ** Top gainers on the Jakarta stock index .JKSE include Red Planet Indonesia Tbk PT PSKT.JK up 30.19%, Bank JTrust Indonesia Tbk PT BCIC.JK up 26.03% and Tigaraksa Satria Tbk PT TGKA.JK up ​19.75%

Asia stock indexes and currencies

at 0808 GMT






% Japan


+0.06 -11.0 <.N2 0.94 -6.53

0 25>



-0.19 -5.85 <.SS -0.25 -15.22





+0.01 -4.16 <.NS -0.06 -6.37


Indonesi IDR=

-0.27 -2.96 <.JK


3.11 a


Malaysia MYR=

-0.13 -5.22 <.KL

0.63 -0.59


Philippi PHP=

-0.13 -2.78 <.PS

2.02 -5.55 nes



+0.66 -6.14 <.KS

0.21 -11.81



Singapor SGD=

-0.09 -2.66 <.ST


3.62 e




+0.07 -6.80 <.TW

1.50 -10.55


Thailand THB=TH

-0.32 -3.58 <.SE -0.09 -2.69


Graphic: World FX rates Link
Asian stock markets Link

Reporting by Riya Sharma in Bengaluru; Editing by Rashmi Aich

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