* Thai baht, China’s yuan lead losses * Eyes on Singapore’s manufacturing PMI in Feb By Upasana Singh March 2 (Reuters) – Asian currencies were broadly lower on Thursday as higher U.S. yields and hawkish comments from Federal Reserve officials rekindled concerns that the central bank will keep raising interest rates. Thailand’s baht weakened 0.5% and China’s yuan fell 0.4%. The Singapore dollar depreciated 0.3%, while Indonesia’s rupiah and the Philippine peso eased 0.2% each. The South Korean won rose 0.7% to be the only outlier in the region. Strong factory data from China on Wednesday that showed better-than-expected economic growth in the region’s biggest trading partner was overshadowed by the Institute for Supply Management survey’s measure of prices paid by manufacturers. While manufacturing in the United States shrunk for a fourth straight month in February, prices for raw materials increased, suggesting inflation could remain elevated for longer. Fed policymakers debated over even more restrictive interest rates to tame stubborn inflation, with Minneapolis Fed President Neel Kashkari saying he was inclined “to push up my policy path.” Kashkari said “at this point… I lean towards continuing to raise further” beyond the 5.4% level that he thought would be adequate to lower inflation. “The boost to Asian currencies from China’s PMI (purchasing managers’ index) numbers could be vulnerable to partial reversal given the current uncertainty surrounding the Fed’s policy trajectory,” said Fiona Lim, senior FX strategist at Maybank. Markets have largely priced in a 25 basis point (bps) increase at the Fed’s March 21-22 meeting, but expectations of a larger 50 bps rise have increased. The benchmark 10-year Treasury yields hit 4% for the first time since November. The two-year yields also touched a more than 15-year high. Adding further pressure to riskier Asian assets, the dollar index, which measures the greenback against a basket of currencies, strengthened 0.3% to 104.70. China’s annual parliament opens on Sunday and will implement the biggest government reshuffle in a decade, confirming Xi Jinping’s new economic team. “Markets will watch the GDP (gross domestic product) target and the implications of (the) government reshuffle,” said Zhaopeng Xing, senior China strategist at ANZ Research. However, Xing added that the Two Sessions meetings are “unlikely to affect broad Asia FX. The Fed story remains dominated.” Separately, Thailand’s unemployment rate in the fourth quarter of 2022 dropped to 1.15% from 1.23% in the previous quarter as the vital tourism sector gained momentum. Most stock markets in the region were trading higher. Equities in Manila and Seoul gained 0.6% each. Bangkok shares and stocks in Kuala Lumpur added 0.2% each. Jakarta shares advanced 0.3%. India’s benchmark index and stocks in Singapore retreated 0.5% and 0.6%, respectively. HIGHLIGHTS: ** Thailand’s customs-based exports fell for a fourth straight month in January and were more than expected ** Indonesia, the world’s biggest palm oil exporter, plans to require palm oil exports to go through a futures exchange in order to create the country’s own benchmark price ** South Korea’s government promised to boost exports and attract tourists as the country’s statistics agency released January data that showed gloomy prospects for the economy The following table shows rates for Asian currencies against the dollar at 0551 GMT. COUNTRY FX RIC FX FX INDE STOCKS STOCKS DAILY % YTD % X DAILY YTD % % Japan -0.31 -4.01 <.N2 -0.04 5.40 25> China EC> India -0.06 +0.21 <.NS -0.52 -4.12 EI> Indonesi -0.24 +1.95 <.JK 0.30 0.21 a SE> Malaysia -0.16 -1.72 <.KL 0.22 -2.82 SE> Philippi -0.18 +1.07 <.PS 0.57 1.19 nes I> S.Korea 11> Singapor -0.30 -0.45 <.ST -0.56 -0.45 e I> Taiwan -0.15 +0.24 <.TW 0.07 10.41 II> Thailand -0.52 -0.83 <.SE 0.18 -2.74 TI> (Reporting by Upasana Singh in Bengaluru; editing by Eileen Soreng)
