Emerging Asian stocks and currencies were largely mixed on Thursday, as the rally fuelled by the U.S. Federal Reserve's dovish turn came to a stall, while Indonesia's rupiah maintained its losses after its central bank kept rates steady.
The rupiah was last down 0.1%, slipping for a second straight day. Jakarta's benchmark stock index fell 0.3%. Bank Indonesia kept its benchmark interest rates unchanged at 6.00% on Thursday during its last meeting for the year, matching Reuters expectations.
The decision follows similar moves by central banks in the Philippines and Taiwan, both of which kept their key rates on hold last week, while sounding less dovish than the Fed.
Meanwhile, equities in the Philippines settled 0.8% lower, logging their biggest daily loss since early October.
Shares in South Korea, Malaysia and Taiwan fell between 0.5% and 0.6%.
Early in the Asian trading day, MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.6%, tracking a sell-off in U.S. stocks on Wednesday.
Markets went into retreat across asset classes as risk sentiment lightened ahead of the release of U.S. core personal consumption expenditure (PCE) index data due on Friday, said Christopher Wong, a currency strategist at OCBC.
"We perceive near-term pullback in risk sentiment as healthy, and with market liquidity thinning into the holiday season, any data surprises can exacerbate price action," Wong added.
The U.S. PCE index is forecast by analysts to have risen by 0.2% in November, with the annual inflation rate slowing to its lowest since 2021 at 3.3%.
Among currencies, the South Korean won slipped 0.5%, while Singapore's dollar and Malaysia's ringgit inched up 0.2% and 0.1%, respectively.
The Philippine peso also edged 0.2% higher. The Bangko Sentral ng Pilipinas retained its inflation target range of 2% to 4% through 2026 and expressed readiness to tweak monetary policy to achieve targets.
Meanwhile, the Chinese yuan was down 0.1%, easing further from Wednesday following the central bank's status quo decision on rates, which was in line with market expectations. Shanghai's shares index, however, advanced 0.6%.
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