AGL 40.00 No Change ▼ 0.00 (0%)
AIRLINK 129.06 Decreased By ▼ -0.47 (-0.36%)
BOP 6.75 Increased By ▲ 0.07 (1.05%)
CNERGY 4.49 Decreased By ▼ -0.14 (-3.02%)
DCL 8.55 Decreased By ▼ -0.39 (-4.36%)
DFML 40.82 Decreased By ▼ -0.87 (-2.09%)
DGKC 80.96 Decreased By ▼ -2.81 (-3.35%)
FCCL 32.77 No Change ▼ 0.00 (0%)
FFBL 74.43 Decreased By ▼ -1.04 (-1.38%)
FFL 11.74 Increased By ▲ 0.27 (2.35%)
HUBC 109.58 Decreased By ▼ -0.97 (-0.88%)
HUMNL 13.75 Decreased By ▼ -0.81 (-5.56%)
KEL 5.31 Decreased By ▼ -0.08 (-1.48%)
KOSM 7.72 Decreased By ▼ -0.68 (-8.1%)
MLCF 38.60 Decreased By ▼ -1.19 (-2.99%)
NBP 63.51 Increased By ▲ 3.22 (5.34%)
OGDC 194.69 Decreased By ▼ -4.97 (-2.49%)
PAEL 25.71 Decreased By ▼ -0.94 (-3.53%)
PIBTL 7.39 Decreased By ▼ -0.27 (-3.52%)
PPL 155.45 Decreased By ▼ -2.47 (-1.56%)
PRL 25.79 Decreased By ▼ -0.94 (-3.52%)
PTC 17.50 Decreased By ▼ -0.96 (-5.2%)
SEARL 78.65 Decreased By ▼ -3.79 (-4.6%)
TELE 7.86 Decreased By ▼ -0.45 (-5.42%)
TOMCL 33.73 Decreased By ▼ -0.78 (-2.26%)
TPLP 8.40 Decreased By ▼ -0.66 (-7.28%)
TREET 16.27 Decreased By ▼ -1.20 (-6.87%)
TRG 58.22 Decreased By ▼ -3.10 (-5.06%)
UNITY 27.49 Increased By ▲ 0.06 (0.22%)
WTL 1.39 Increased By ▲ 0.01 (0.72%)
BR100 10,445 Increased By 38.5 (0.37%)
BR30 31,189 Decreased By -523.9 (-1.65%)
KSE100 97,798 Increased By 469.8 (0.48%)
KSE30 30,481 Increased By 288.3 (0.95%)

BENGALURU: Emerging Asian currencies and stocks rose on Wednesday, with investors awaiting the US Federal Reserve’s policy decision later in the day, while the yen was choppy after the Bank of Japan raised rates for the second time since 2007.

The South Korean won and the Thai baht gained the most among currencies, rising 0.6% and 0.5%, respectively.

Investors now await the Fed’s decision, with markets expecting the central bank to stay pat on interest rates. However, any commentary on a possible rate cut in September will keenly eyed.

Market participants have largely priced in a September rate cut, with more than 87% odds of a 25 basis-point reduction, according to the CME FedWatch tool.

The Bank of Japan raised its short-term interest rate target to 0.25% and unveiled a detailed quantitative tightening plan on Wednesday, pushing the yen to its highest in a week, before the currency pared all of its gains.

“The elephant in the room is JPY, which has been highly volatile. The sharp recent appreciation suggests that many currency traders made correct bets on the BoJ’s rate move today,” Duncan Wrigley, Chief China+ economist at Pantheon Macroeconomics, said in a note.

Other Asian currencies such as the Singapore dollar, the Philippines peso and the Malaysian ringgit traded flat to 0.3% higher.

The Fed cutting rates could pave the way for Asian central banks to start easing their own policy stances, even though this may not be as beneficial for emerging Asia, said Jonathan Koh, an economist and FX analyst at Standard Chartered.

“I think some (Asian) central banks could cut interest rates following the Fed, so in a way the interest rate differential may not actually narrow in favour of Asian currencies but usually when the Fed cuts, it may lead to a risk-on sentiment for EM Asia currencies,” Koh said.

A wider interest rate differential is usually beneficial for riskier emerging market assets as investors will seek higher returns, boosting capital inflows.

Investors also await inflation data from Indonesia and South Korea this week, to gauge the stance of their respective central banks on interest rates. Both central banks had held rates earlier in the month, citing more economic evidence was needed to pivot to rate cuts.

Most emerging Asian equities rose, with Chinese stocks advancing about 1.9%, as investors cheered a Politburo meeting that emphasised the need for a boost in consumption.

Bourses in Thailand, Philippines, Malaysia and Indonesia traded higher between 0.1% and 0.8%.

Comments

Comments are closed.