Asian Currencies Decline, Stocks Subdued as U.S. Job Data Awatied

CURRENCY - SINGAPORE. Most Asian currencies weakened against a firmer U.S. dollar on Friday while regional stock markets were mixed, as investors awaited the key U.S. non-farm payrolls report for further clues to Federal Reserve policy.

The South Korean won and the Malaysian ringgit led losses in forex markets. The won fell 0.7% and the ringgit depreciated 0.6%. Indonesia's rupiah, the Singapore dollar and China's yuan eased 0.1% each.

Meanwhile, the Philippine peso reversed early losses to gain 0.2%. India's rupee and Thailand's baht rose 0.1% each.

The European Central bank (ECB) and the Bank of England (BoE) hiked rates by 50 basis points (bps) each on Thursday, with the BoE saying the tide was turning against inflation and the ECB indicating at least one more hike was on the horizon before re-evaluating its rate hike path.

The decisions followed the U.S. Federal Reserve's 25 bps raise on Wednesday, after which Chair Jerome Powell said that the "disinflationary" process in the world's largest economy has started.

Investors' focus now turns towards the non-farm payrolls report later in the day to gauge the strength of the labour market. Any signs of easing in the strong jobs market could heighten hopes of an imminent pause to the Fed's monetary tightening streak.

"In the very near term, the U.S. labour market data would be the key," said Poon Panichpibool, a markets strategist at Krung Thai Bank.

"The theme for now could be 'good data = return of hawkish Fed = bad for the market' i.e. very upbeat NFP (non-farm payrolls) or strong rises in wage growth (more than +0.3% m/m) could hurt overall market sentiment."

The dollar index, which measures the greenback against a basket of currencies, rose 0.1% to 101.89 as of 0407 GMT, up from Wednesday's nine-month low of 100.80.

Meanwhile, a Reuters poll found Indonesia's economic growth likely slowed in the fourth quarter as declining commodity and energy prices hit exports, and a widely expected global recession could accelerate the slowdown this year.

Official data for the fourth quarter gross domestic product is due on Feb. 6.

Markets are also eyeing the deepening Adani rout in India. Market losses of the conglomerate swelled above $100 billion on Thursday on the back of a U.S. short-seller's reports.

Among regional stock markets, equities in Jakarta advanced 0.8% to hit a more than one-month high. South Korea's benchmark index added 0.5%, while stocks in Singapore rose 0.2%.

Equities in Manila and Bangkok inched 0.1% lower.