Asian currencies subdued, stocks mixed as Fed pivot rally fades -December 18, 2023 at 01:15 am EST

* Malaysian ringgit slips 0.3%, Thai baht dips 0.2%
* Fed officials less dovish remarks dampen rate cut bets
* Bank Indonesia to decide policy rates on Thursday

By Poonam Behura
       Dec 18 (Reuters) - Most emerging Asian currencies were
subdued on Monday as the Federal Reserve-fuelled risk rally
faded after investors dialled back expectations of imminent
interest rate cuts by the U.S. central bank on recent comments
from policymakers. 
    The Malayian ringgit, the region's worst-performing
currency this year, edged 0.3% lower. The Thai baht and
the Philippine peso also inched 0.2% lower.
    Regional equities were mixed, with those in Singapore
and Thailand down 0.4% and 0.2%, respectively. Stocks in
Philippines advanced 0.5%. 
    "Risk-rally is facing a bit of a reality check as markets
weigh recent comments from Fed officials," said Christopher
Wong, currency analyst at OCBC.
    "Expectations for Fed loosening can overshoot and when it
corrects, the USD could still be subjected to rebound."  
    New York Fed President John Williams said on Friday it was
premature to speculate about interest rate cuts in March 2024.
The dollar was still hovering near four-month lows on Monday.
    The Indonesian rupiah, South Korean won
and the Singaporean dollar were all flat. The Taiwanese
dollar was down 0.1%.  
    Regional stocks and currencies received a boost last week
after the Fed kept interest rates unchanged as expected and
signalled prospects of lower borrowing costs next year. 
    Echoing the Fed, the Philippine central bank kept its
benchmark interest rate steady for a second straight meeting
last week, and Taiwanese central bank kept interest rate
unchanged on Thursday.  
    However, both central banks were less dovish than the Fed,
with the former not convinced about the downward trend in
inflation holding and the latter flagging it would not
necessarily follow the Fed in likely rate cuts next year.
    The focus is now on Indonesia's interest rate decision later
this week. The central bank said last month it would maintain
its benchmark rate at the current level into 2024 barring any
major changes in global dynamics.
    "On the one hand, headwinds to growth have mounted as
Indonesia's real policy rates (are) the most restrictive in
ASEAN; as well as by historically," Vishnu Varathan of Mizuho
Bank wrote.
    "On the other hand, the tentative and nascent recovery of
rupiah traction warns against premature easing." 
    Varathan's base case is for Bank Indonesia to stand pat at
its last meeting in 2023. 
    Back in the U.S., investors will also focus on core personal
consumption expenditure (PCE) index data, the Federal Reserve's
preferred measure of inflation, scheduled for release on Friday.


    HIGHLIGHTS:    
    ** China's economic conditions to improve in 2024 - central
finance office
    ** Polls may imperil emerging Asia's policy stability
    ** Bank of Japan (BOJ) kicks off its two-day monetary policy
meeting
    
  Asia stock indexes and currencies                         
 at 0402 GMT                                          
 COUNTRY   FX RIC          FX     FX   INDEX  STOCKS  STOCKS
                      DAILY %  YTD %           DAILY   YTD %
                                                   %  
 Japan                  -0.03  -7.79  <.N225  -0.84   25.29
                                      >               
 China                               >               
 India                  +0.09  -0.25  <.NSEI   -0.39   18.05
                                      >               
 Indonesi               +0.00  +0.48  <.JKSE   -0.18    4.78
 a                                    >               
 Malaysia               -0.30  -6.02  <.KLSE    0.25   -1.97
                                      >               
 Philippi               -0.11  -0.20            0.54   -0.80
 nes                                                  
 S.Korea                             >               
 Singapor               -0.04  +0.56           -0.43   -4.56
 e                                                    
 Taiwan                 -0.14  -1.93  <.TWII   -0.29   24.65
                                      >               
 Thailand               -0.23  -0.95  <.SETI   -0.23  -16.83
                                      >               
 

    
 (Reporting by Poonam Behura in Bengaluru; Editing by Janane
Venkatraman)