MOST Asian equities fell on Wednesday, while currencies largely lacked direction after softening U.S. data and renewed banking sector concerns fanned fears of a recession and dampened risk appetite.
Stocks in Kuala Lumpur and Seoul slipped 0.7% and 0.2%, respectively. Malaysia's ringgit weakened 0.4%, while Indonesia's rupiah reversed course and was last up 0.1%.
The greenback held onto overnight gains as investors turned to safe-haven assets after U.S. consumer confidence dropped to a nine-month low in April, further heightening the risk that the economy could fall into recession this year.
Meanwhile, reports of First Republic Bank considering asset sales after disclosing a $100 billion plunge in deposits for the quarter stoked fresh banking sectors worries and further hurt investor sentiment.
Investor attention is also on major central bank meetings, with the Bank of Japan's policy decision due on Friday and the U.S. Federal Reserve meeting next week.
Markets are now pricing in a 76% chance for the Fed to deliver a 25 basis point (bps) rate hike, according to CME FedWatch, down from 90% at the start of the week.
"We are wary of downside risks and think that the widely expected last 25 bps hike next week might not be quite cast in stone. With the Fed on blackout, data and sentiment could well shift pricing materially," analysts at DBS said in a note.
In the Philippines, the central bank governor said Bangko Sentral ng Pilipinas (BSP) aims to maintain its interest rate differential with the Fed and considers it "dangerous" to cut interest rates faster than the Fed.
The peso dipped 0.1%, and equities fell as much as 1.2%, their worst intraday fall in nearly a month. South Korea's consumers' inflation expectations fell in April to the lowest in nearly a year, while overall consumer sentiment hit a 10-month high.
The won, Asia's worst performing currency so far this year, weakened 0.3%. Thailand's baht firmed 0.5% and stocks added 0.4%.
The country's customs-based exports contracted for a sixth straight month in March, falling 4.2% from a year earlier.
However, the decline was less severe than the forecast for a of 14.0% drop for March, according to a Reuters poll.
China's yuan also rebounded from a more than six-week low after the country's cabinet issued a plan to stabilise its vital trade sector, including supporting exports of automobiles and facilitating visas for overseas businessmen.
HIGHLIGHTS
** Singapore's central bank said the city-state faces an uncertain economic outlook with downside risks as the global economy slows
** The Federal Reserve will publish its internal review of its supervision of Silicon Valley Bank on April 28
** Taiwan's export-dependent economy likely slipped into a recession in the first quarter, a Reuters poll showed - Reuters
