REFILE-EMERGING MARKETS-Indonesia's rupiah, yields fall as Fed officials raise talk of tapering

  • 5/20/2021
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(Corrects day of the week in the first paragraph) * Rupiah hits a 2-week low * Indonesian 10-year bond yields at over 3-week low * Yields on Malaysia, Thai bonds also fall to around 1-1/2 month lows May 20 (Reuters) - Indonesia"s rupiah and benchmark bond yields fell to multi-week lows on Thursday, spooked by the hint of tapering in the U.S. Federal Reserve"s April meeting that lifted the dollar and weighed on Asia"s other emerging currencies. The Philippine peso fell 0.2%, while South Korea"s won and China"s yuan dipped, outdone by a 0.8% drop by the rupiah, which backs some of emerging markets" highest-yielding debt. Losses were capped, though, as U.S. 10-year Treasury yields eased off session highs and the dollar steadied after popping off a three-month low. Fed minutes published on Wednesday said "a number" of officials thought it might be appropriate "at some point" to "begin discussing a plan for adjusting the pace of asset purchases," in comments that surprised some investors. "For the record, the Minutes were unambiguous on the need to be defensively dovish... there was no perceptible shift in the dovish mood or commitment by the FOMC," Mizuho said in a client note, noting the Fed"s caution on where several indicators, such as inflation and employment, still stand. The yield on Indonesia"s 10-year bonds climbed to its highest since April 28, rising 12.4 basis points to 6.529%. Returns on Thai and Malaysian bonds also noticeably rose, sitting around 1-1/2 month highs. While the ringgit was a tad weaker, the baht , the region"s worst performer so far this year, gained 0.2%. On Tuesday, the Thai cabinet approved a further borrowing of 700 billion baht ($22.30 billion) to tackle the impact of the COVID-19 outbreak as its current 1 trillion baht borrowing is almost used up. Asia"s emerging stocks markets were more mixed with Taiwan giving up half a percent and Indonesia rising 0.8%. The rest of the region traded within those outer-ranges. The Fed meets next in June and markets will be closely eyeing the outcome of that meeting for changes to growth, inflation and unemployment forecasts and whether rising consumer prices and a recovering U.S. economy will change its outlook. HIGHLIGHTS: ** Thailand"s 10-year government bond yields rise 4.5 basis points to 1.77%, and Malaysia"s 10-year yields edged up 1.09 bps to 3.226% ** Singapore Airlines posts record $3.2 bln annual loss, to issue convertible bonds ** Indonesian digital lender aims to tap into $314 bln gig economy Asia stock indexes and currencies at 0335 GMT COUNTRY FX RIC FX FX INDEX STOCKS STOCKS DAILY % YTD % DAILY % YTD % Japan +0.08 -5.39 -0.05 2.14 China -0.06 +1.40 -0.41 0.68 India +0.00 -0.14 0.00 7.50 Indonesia -0.80 -2.43 0.70 -2.98 Malaysia -0.07 -2.88 0.08 -2.79 Philippines -0.15 +0.36 -0.43 -12.90 S.Korea -0.09 -4.00 -0.47 9.91 Singapore +0.08 -0.92 0.28 9.47 Taiwan +0.14 +1.94 -0.60 8.84 Thailand +0.16 -4.56 -0.15 7.63 ($1 = 31.3900 baht) (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Simon Cameron-Moore) Our Standards: The Thomson Reuters Trust Principles.

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