BENGALURU: Asian currencies were largely trading down on Wednesday, while most equities in the region ticked up, ahead of interest rate decisions by the Indonesian and US central banks.

The Philippine peso depreciated 0.4% while the Taiwanese dollar slipped 0.2%. Seoul stocks jumped 1.3% while Singapore stocks added 0.3%.

After Bank of Japan’s historic shift away from negative interest rates on Tuesday, focus is now on the US Federal Reserve policy meeting due later in the day where the risk is the new economic projections - the dot plot - could signal just two interest rate cuts, down from three, or a later start to the policy easing.

“The next step for the Fed is still a cut and a less restrictive rates environment,” said Christopher Wong, a currency strategist at OCBC.

Central banks in Asia’s emerging markets are waiting for a rate cut from the Fed, and a cut in June would open the door for them to start lowering their key rates given the progress on inflation, said Alex Loo, a macro strategist at TD Securities.

The Indonesian rupiah slipped 0.1% while local stocks fell 0.2%.

Bank Indonesia (BI) is expected to keep its key policy rate unchanged on Wednesday, but cut in the second quarter of the year, according to a Reuters Poll of economists.

Policy normalisation by BI is only likely to happen once the Fed starts easing to mitigate the impact on rupiah, Maybank said in a note.

The Chinese yuan was flat while stocks in Shanghai jumped 0.5%. The country’s central bank left its benchmark lending rates unchanged, as widely expected.

The Malaysian central bank called for an acceleration of structural reforms to ensure long-term strength, with economic growth set to benefit from a recovery in exports and robust domestic spending this year.