Peso Leads Gains As Regional Data Show Mounting Inflationary Pressures In Asia

Tuesday was inflation day in Asia, with data from South Korea, Thailand and the Philippines hitting the wires. Markets in China, Hong Kong and Taiwan were shut in observance of public holidays.

• KRW: The won traded with a slight bullish bias after South Korea's consumer price inflation quickened to a decade-high, prompting the BoK to ditch its earlier +3.1% Y/Y inflation forecast for this year with a comment that it will likely be "much higher". The Bank is preparing for a monetary policy meeting next week even as its new Governor-nominee has not yet received parliamentary approval.
• IDR: The rupiah gave away its initial gains, holding a fairly narrow range. Local press cited Bank Indonesia Governor Warjiyo as noting that accelerating inflation stems from higher domestic demand, with policymakers keeping an eye on the impact of higher global commodity prices nonetheless.
• MYR: Spot USD/MYR pulled back from a one-week high. Bloomberg cited speculation that local exporters were reluctant to convert USD earnings into MYR amid heightened global uncertainty.
• PHP: The peso extended its recent bull run, outperforming all regional peers, with spot USD/PHP lodging worst levels in a month. The PSA reported that CPI inflation accelerated to +4.0% Y/Y, beating analysts' expectations. BSP Gov Diokno said that non-monetary measures are best to address supply shocks but policymakers will keep an eye on second-round effects, although they still see CPI anchored to the target.
• THB: The baht held a tight range. Thailand's CPI inflation registered at +5.73% Y/Y in March, smashing expectations of a +5.55% print and reaching the fastest pace since 2008 in a stark reminder of mounting price pressures.