ASIAN stocks markets and currencies struggled for direction on Friday, but were set to post weekly gains as risk sentiment got a boost after a surprisingly soft U.S. inflation data fuelled bets for a September rate cut.
In Singapore, markets advanced 0.7% to hover at their highest levels in more than six years. The benchmark index was set for its biggest weekly gain since April-end, buoyed by bank stocks, as investors turned towards the city-state for lucrative and reliable dividend yields.
Singapore's trade-dependent economy grew 2.9% in the second quarter of 2024 from a year earlier, better than economists expected, according to preliminary government data.
Maybank analysts raised their full-year GDP forecast for Singapore to 3% and said they expect the central bank to maintain the current modest appreciation stance at both the July and October meetings this year.
Among other markets, Taiwan shares slipped 2.1% for the day, tracking overnight losses in Wall Street, as investors rotated into smaller companies following the U.S. inflation print.
The index, however, was set for its second weekly gain. Equities in the Philippines and Indonesia rose on Friday, and were poised for their third and fourth weekly gains, respectively.
The MSCI Emerging Markets currencies index climbed as much as 0.3%, and held ground just below a six-week high it reached on Thursday.
Data on Thursday showed U.S. consumer prices fell in June for the first time in four years, firmly putting disinflation back on track and drawing the Fed another step closer to cutting interest rates in September.
"This is certainly perceived to be another "good data" that Powell was referring to that can give the Fed greater confidence to start easing," Maybank analysts wrote.
Most regional currencies struggled even as the dollar remained on the defensive.
The Malaysian ringgit gained as much as 0.4% to hit a six-month high, and was set for its best week since mid-May. The South Korean won dipped around 0.3%.
Both Malaysian and South Korean central banks stood pat on their interest rates on Thursday. Thailand's baht slipped 0.2%, but was set to post its best week since mid-May, and the Indonesian rupiah was set for a third straight weekly gain.
HIGHLIGHTS:
** Japanese yen surges, ringing intervention alarm bells
** China June iron ore imports retreat on anticipation of seasonal demand slowdown
** Malaysia's May industrial production up 2.4% y/y, below forecast - Reuters
