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Asian currencies, stocks underpinned by China’s quarantine ease

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Most emerging Asian currencies were

trading in green on Tuesday against a relatively weaker U.S.

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dollar, coming off from an extended Christmas holiday, as risk

sentiment improved after China eased COVID-19 quarantine

restrictions.

The South Korean won gained the most, rising

about 0.7% to hit its highest since June 10.

China, Asia’s largest economy, said it will stop requiring

inbound travelers to go into quarantine from Jan. 8 in addition

to downgrading the seriousness of COVID-19 as it has become less

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virulent, leading to hopes of economic growth picking up faster.

Beijing has borne the brunt of harsh coronavirus curbs since

the onset of the pandemic in 2020, which has battered economic

activity and global supply chains due to frequent lockdowns.

Both the Chinese yuan and benchmark share price

index firmed 0.1% and 0.8%.

Other Asian units such as the Singapore dollar, Thai

baht Malaysian ringgit also gained 0.1% each.

The Singapore dollar is the only Asian currency to have

logged positive growth on a year-to-date basis.

“We have seen a bit of firming up of Asian currencies, due

to the reopening in China,” said FX strategist Moh Siong Sim at

the Bank of Singapore. “We are getting better clarity on the

endpoint in terms of the reopening and I think we’re moving in

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the right direction in the medium term.”

Meanwhile, investor sentiment was also aided by a

softer-than-expected reading of the Personal Consumption

Expenditures index in the United States on Friday, prompting

expectations that the U.S. central bank will start dialing down

its aggressive policy interest rate hike path.

However, some caution still prevailed as analysts said there

was more work to do to bring inflation down due to a resilient

labor market.

At 0354 GMT, the dollar index, which measures the

strength of the greenback against six major currencies, was at

104.13.

Among Asian stocks, Indonesian equities rose the

most, gaining 1%, while others such as Taiwan, Thailand

and the Philippines firmed between 0.2% and 0.7%.

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MSCI’s broadest index of Asia-Pacific shares outside Japan

was up 0.5%.

U.S. markets were closed on Monday on account of Christmas.

HIGHLIGHTS:

** Indonesian 10-year benchmark yields fall to 6.909%

** China revises 2021 GDP growth to 8.4% from 8.1% –

Reuters

** Top gainers in Singapore’s benchmark include Mapletree

Logistics Trust, up 1.9%, and SATS, up 1%

Asia stock indexes and currencies at

0354 GMT

COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS

DAILY % % DAILY YTD %

%

Japan -0.04 -13.42 <.n225> ! !

China >

India -0.08 -10.13 <.nsei>

Indonesi -0.16 -8.97 <.jkse a>

Malaysia +0.09 -5.75 <.klse>

Philippi -0.40 -7.96 0.34 -7.85

nes

S.Korea >

Singapor +0.17 +0.28 0.44 4.75

e

Taiwan +0.06 -9.78 <.twii>

Thailand +0.07 -3.65 <.seti>

(Reporting by Archishma Iyer in Bengaluru; Editing by

Christopher Cushing)

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