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Asian stocks fall on dollar strength, Bank of Korea hikes rates

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Asian emerging market shares were broadly

weaker on Thursday, hurt by the dollar’s strength, as a hawkish

tilt by Federal Reserve policymakers encouraged bets for quicker

U.S. interest rate hikes, and made investors more wary of

riskier assets.

Equities in South Korea dropped, after the country’s central

bank raised interest rates and upgraded its 2022 inflation

forecast, bolstering expectations for further policy tightening.

Shares in Seoul fell as much as 0.7%, while stocks


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in Manila, Singapore and Shanghai dropped

0.8%, 0.2% and 0.1%, respectively.

Supporting the greenback, several Fed policymakers said they

would be open to speeding up the taper of their bond-buying

program if inflation stayed high, and to move more quickly to

raise interest rates, minutes of the central bank’s Nov. 2-3

policy meeting showed on Wednesday.

Hawkish sentiment from the Fed weighed on regional

currencies, with Malaysia’s ringgit, Philippine peso

and the Indonesian rupiah easing between 0.1% and


In South Korea, Bank of Korea’s monetary policy board raised

the policy interest rate by 25 basis points to

1.00%, as expected by 29 of 30 analysts in a Reuters poll

The central bank is expected to continue its policy


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tightening cycle with rates tipped to reach 1.50% by the end of

2022, raising concerns about whether households will be able to

service their debt repayments. The won weakened 0.3%.

“Given BOK’s hints at the October meeting, today’s hike is

already well-priced in and therefore, its actualization will not

move KRW rates,” Duncan Tan, Rates Strategist at DBS said in a


“What could move KRW rates today… is likely to be BOK’s

communications related to the 2022 hike path”

Stocks in Jakarta gained 0.7%, a day after the

country’s central bank governor said Bank Indonesia plans to

reduce the amount of excess liquidity in the banking system, but

will keep interest rates low until it sees signs of inflation


In a fresh development in China’s property sector crisis,


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Kaisa Group Holdings Ltd said it wants to extend the

maturity of a $400 million bond by a year-and-a-half as part of

efforts to avoid a default and resolve a liquidity crisis.

Shares of the embattled developer, which resumed trading

after suspension on Nov. 5, soared as much as 23.8%.


** Top gainer on the Jakarta stock index was First

Media Tbk PT, up 25%

** In the Philippines, top index loser was Converge

Information & Communications Technology Solutions Inc

, down 3.3%

** Malaysia’s ringgit hits lowest since Aug. 24

Asia stock indexes and currencies at 0403 GMT



% % %

Japan +0.04 -10.51 0.79 7.62

China +0.06 +2.19 -0.10 3.34

India +0.00 -1.79 0.05 24.62

Indonesia -0.13 -1.63 0.65 12.50

Malaysia -0.40 -4.87 -0.15 -6.59

Philippines -0.13 -4.86 -0.83 3.05

S.Korea -0.28 -8.71 -0.36 3.82

Singapore -0.03 -3.48 -0.17 13.29

Taiwan +0.03 +2.51 0.09 19.86

Thailand -0.03 -10.11 0.10 13.95

(Reporting by Harish Sridharan in Bengaluru; Editing by Simon




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