Asian currencies firm, equities advance as risk sentiment improves



ASIAN currencies strengthened against a subdued dollar and equities advanced on Tuesday as risk appetite got a boost from an upbeat start of corporate earning season in the United States and a reversal in the United Kingdom's financial policy.

The U.S. dollar too took a breather from its recent rally with the index sagging to near a 1-1/2-week low, boosting regional currencies.

In the United Kingdom, new finance minister Jeremy Hunt immediately reversed course on many of Prime Minister Liz Truss' fiscal measures, which had unnerved markets in recent weeks.

Also aiding risk sentiment was consensus-beating results for Bank of America, which lifted Wall Street overnight. That injected positive sentiment into global markets, lifting Asian equities.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.43%, while Japan's Nikkei was up 0.6%.

"Better than expected earnings means equities could further rally and we could see (the) dollar further retrace, which should be slightly positive for emerging Asia," said Alex Loo, macro strategist for TD Securities.

The brokerage, however, is recommending buying dollars on dips over the long-term given that inflation in the United States doesn't seem to be easing, Loo said.

Among emerging markets in Asia, South Korea's won appreciated the most for currencies, strengthening as much as 1.1% to touch over a one-week high, while its equities advanced about 1%.

The Philippine peso, Singapore dollar, Indonesian rupiah, Malaysian ringgit and the Indian rupee appreciated between 0.2% and 0.5%.

Meanwhile, China's yuan and equities were flat amid the nation's once-in-five-year Communist Party Congress. Beijing delayed the release of economic indicators scheduled for publication this week, including its third-quarter gross domestic product data due on Tuesday.

The data was expected to show that China's GDP expanded 3.4% in the period from July to September, according to a Reuters poll, as recent supportive government policies have started to impact the economy.

The Indonesian rupiah appreciated 0.2%, while the country's 10-year benchmark yield touched a near three-month high owing to a sell-off by foreign investors.

Outflows from Indonesia's bond market, considered one of the highest yielding in the region, reached $11 billion in the first three quarters of 2022, nearly double the $5.7 billion for all of 2021.

Nearly 60% of respondents in a Reuters poll expected Bank Indonesia, until recently one of the world's last dovish central banks, to deliver a second successive half-point interest rate hike on Thursday as it looks to catch up with its peers and tackle inflationary pressures.

Most Asian stocks markets recorded gains, with Philippine equities marching to their sixth session of straight gains, up 1.3%.

Singaporean shares remained the only outlier, hovering around the 3,000-mark, down 0.1%.