Asian currencies and stocks mostly fell with the Indian rupee making steep losses as investors sold off riskier assets on red-hot US inflation data.
The rupee dropped 0.5 percent, its worst day since Oct. 6, with the US inflation figure weighing particularly hard a day after the central bank held its key rates steady.
The Thai baht was another top loser among currencies, down 0.3 percent and on track for its worst session since Jan. 28 after central bank officials said inflation would exceed a target range of 1-3 percent in the early part of 2022 before falling in the second half.
Thai shares also lost 0.3 percent.
Elsewhere, the Malaysian economy returned to growth in the fourth quarter of 2021 – an expansion of 3.6 percent from a year earlier due to the easing of coronavirus curbs.
The ringgit was down 0.1 percent while stocks were up 0.2 percent.
Comments from St. Louis Federal Reserve Bank President James Bullard that a consumer price surge of 7.5 percent last month had made him “dramatically” more hawkish kept the greenback and treasury yields firm.
Bank of America Securities analysts said central banks in Asian emerging markets are unlikely to move towards rate tightening in lockstep with the Fed, and will instead focus on helping domestic demand recover amidst modest inflation rates.
The Philippines led falls in Asian equities with a 2.2 percent drop for its benchmark index, its worst day since Dec. 31. That was followed by Indonesia, down 0.7 percent and poised for its sharpest fall since Feb. 3.
The Indonesian rupiah was down 0.2 percent, a day after the central bank governor said it would review policy rate levels in the third quarter to head off any spike in inflation next year.
In South Korea, stocks fell 0.9 percent while the won was down 0.2 percent.
