* China's yuan at 3-year high
* Malaysian stocks fall most in two months
* Taiwan dollar hits highest level since 1997
By Sameer Manekar
May 31 (Reuters) - Malaysian equities led emerging Asian
stock markets lower on Monday as rising coronavirus infections
and an imminent lockdown in the country dampened risk appetite,
while gains in China's yuan benefitted some currencies.
The yuan hit its strongest since May 2018. The
currency has firmed more than 1.5% this month, driven by a slide
in the U.S. dollar, heavy foreign investment inflows into
China and reduced tourism-related outflows over the past couple
of months.
Prior to market open, China's central bank lifted its
official yuan midpoint to a new three-year high against the
dollar.
"Yuan-related currencies are likely to be supported by a
firmer yuan as reflected in the moves in the likes of Taiwan
dollar and South Korean won today," said Mitul Kotecha, Chief EM
Asia and Europe Strategist at TD Securities.
Taiwan and South Korea are also export-oriented economies
whose trade prospects are seen linked to China's economic
fortunes.
Taiwan's dollar and the South Korean won
appreciated as much as 0.6% and 0.4%, respectively, with the
former touching its firmest since April 1997.
However, the pace of the yuan's rally has slowed after
regulators signalled concerns over strong one-way bets on the
currency.
"While yuan is likely to remain firm amid strengthening bond
and equity inflow, we expect official resistance to appreciation
pressures to grow," Kotecha said.
Equities in Kuala Lumpur slid as much as 1.6%,
marking their worst day in two months, as a new nationwide
lockdown from June threatened to disrupt the Southeast Asian
nation's economic recovery.
The ringgit slipped as much as 0.3% and was on track
to lose more than a percent in May.
"The closure of everything other than essential economic and
service sectors will mean a significant hit to the economy in
the current quarter," analysts at Dutch bank ING said in a note.
The Philippine bourse lost more than a percent and
the peso weakened 0.3%, though it was on track to
appreciate more than a percent in May.
The country's central bank said it would maintain easy
monetary policy until there was a clear economic recovery, and
noted that "further adjustments" to policy by the second half of
2022 were possible.
Vietnamese stocks slipped from a record high hit
earlier in the session and gave up as much as 1%. They were
still on track to record a more than 6% gain for the month.
Meanwhile, investors in Asia will keep tabs on U.S. jobs
data later this week for signs of recovery in the labour market
and signals of tightening monetary policy from the Federal
Reserve.
HIGHLIGHTS:
** Indonesian 10-year benchmark yields edge lower to 6.422%
** South Korean won on track to end May largely flat
** Indonesian rupiah set to gain more than a percent in May
Asia stock indexes and
currencies at 0421 GMT
COUNTRY FX RIC FX FX INDE STOCK STOCK
DAILY YTD X S S YTD
% % DAILY %
%
Japan +0.13 -5.8 <.N2 -1.05 5.11
6 25>
China <CNY=CFX +0.10 +2.6 <.SS -0.20 3.47
S> 3 EC>
India +0.00 +0.8 <.NS -0.23 10.15
6 EI>
Indones -0.07 -1.7 <.JK 0.82 -1.38
ia 5 SE>
Malaysi -0.12 -2.8 <.KL -0.98 -2.98
a 3 SE>
Philipp -0.07 +0.6 <.PS -1.13 -7.57
ines 3 I>
S.Korea <KRW=KFT +0.25 -2.3 <.KS -0.10 10.86
C> 8 11>
Singapo -0.02 -0.1 <.ST -0.53 11.18
re 4 I>
Taiwan +0.37 +2.9 <.TW 1.17 15.86
6 II>
Thailan +0.00 -4.1 <.SE 0.19 9.36
d 0 TI>
(Reporting by Sameer Manekar in Bengaluru; Editing by
Jacqueline Wong)
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