Asian markets poised for weekly gains ahead of key US jobs data

Asian shares and currencies: Most Asian currencies and equities are on track for weekly gains, driven by anticipation surrounding crucial US jobs data. Investors remain buoyed by the prospects of potential US rate cuts later in the year, with Taiwanese equities poised for their strongest weekly performance in over a year.

Taiwan stocks surged by 4.5 per cent this week, hitting record highs, propelled by optimism surrounding artificial intelligence-linked stocks. This marks their best week since February 3, 2023. Equities in South Korea also posted gains, climbing over 1 per cent for the week and eyeing their best week since early February.

MSCI's gauge of emerging market currencies rose by as much as 0.3 per cent on the day, reaching its highest level since early January. The optimism surrounding the start of a rate easing cycle by the US Federal Reserve strengthened after Chair Jerome Powell's recent remarks indicating that rate reductions may be appropriate later this year.

"The Fed's cautious stance, emphasizing the possibility of rate cuts, has reassured the market," commented Sim Moh Siong, an FX strategist at Bank of Singapore.

Investor focus now turns to the eagerly anticipated US nonfarm payrolls report scheduled for release later on Friday, with expectations for a slowdown in job growth for February.

Following Powell's comments, Asian currencies experienced broad gains, with the South Korean won climbing 0.8 per cent - marking its best day since December 14. The Indonesian rupiah also jumped 0.4 per cent.

For the week, the Singapore dollar and Philippine peso each rose by 0.9 per cent, with the Singapore dollar eyeing its best week since November 17 and the peso on track for its best week since November 3.

The Malaysian ringgit advanced by more than 1 per cent for the week, marking its best performance since July 14, 2023. The currency rose by 0.3 per cent on the day, reaching its highest level since January 16.

Bank Negara Malaysia (BNM) maintained its stance on interest rates for a fifth consecutive meeting on Thursday, emphasizing that the currency was undervalued and did not reflect Malaysia's positive economic fundamentals and prospects.

"Inflation data from China, due on March 9, and from India next week will also be closely monitored by investors," noted Lavanya Venkateswaran, a senior ASEAN economist at OCBC.

Overall, the week has been characterized by cautious optimism in Asian markets, with investors eagerly awaiting key economic indicators and central bank decisions in the weeks ahead.

(With Reuters inputs)