* Thai baht hits 10-month low
* Indonesian rupiah lowest in 6 months
* U.S. bond yields scaling 16-year peaks
* Dollar firm at 10-month highs
By Roushni Nair
Sept 26 (Reuters) - Asian currencies fell on Tuesday,
with Thailand's baht and Indonesia's rupiah leading losses,
pressured by strength in the greenback as signs of economic
resilience and a hawkish U.S. Federal Reserve rhetoric pushed
U.S. bond yields to 16-year highs.
The baht depreciated as much as 0.8% by 0344 GMT,
its lowest level since Nov. 10, 2022. The rupiah weakened
as much as 0.4% to its lowest point in six months.
The yield on Thailand's benchmark 10-year bond
was at 3.26%, its highest level since May 2022.
Investor sentiment toward the baht is being pressured by
continued fund outflows driven by wider rate differentials - the
interest rate difference between two countries - and a recent
uptick in oil prices that could fan inflationary pressures in
the net importer.
Investors will now turn their focus to the Bank of
Thailand's policy decision on Wednesday, where the central bank
is widely expected to leave its key policy rate unchanged at
2.25%, according to a Reuters poll of analysts.
Concerns around fiscal damage from higher spending by the
country's new government, which took office last month, to help
finance fresh policies to stimulate the underperforming economy
have also sapped investor confidence, according to Christopher
Wong, an FX strategist with OCBC.
"To some extent, the following could be possible given some
of the fiscal plans that are installed, but these fund outflows
do not just pertain to Thailand, but across most of the region
because of the higher-for-longer Fed (rate) narrative," Wong
added
The U.S. dollar index touched its highest since
November at 106.1 after hawkish Federal Reserve rhetoric and a
budget deficit to be financed by borrowing led the 10-year U.S.
Treasury yield up more than 45 basis points in September to top
4.5% for the first time since 2007.
Back in Asia, the South Korean won depreciated by
0.9% while the Malaysian ringgit and the Philippine peso
weakened nearly 0.2%, each.
China's yuan was largely flat after the central
bank set the official guidance rate at its widest gap yet
against market estimates, while offshore funding continued to be
tight.
Stocks in emerging Asia were largely mixed, with those in
Malaysia and Philippines advancing 0.2% and 1.2%,
respectively. Shares in South Korea and China
fell 1.3% and 0.3%, respectively.
HIGHLIGHTS:
** Indonesian 10-year benchmark yields rise 8.9 basis points
to 6.830%
** Singapore Aug manufacturing output dives 12% y/y, more
than expected
** Thai exports rise 2.6% y/y in August, first increase in
11 months
Asia stock indexes and currencies
at 0507 GMT
COUNTRY FX RIC FX FX INDEX STOCKS STOCKS
DAILY % YTD % DAILY YTD %
%
Japan +0.03 -11.9 -0.90 25.93
1
China
India -0.08 -0.59 0.10 8.77
Indonesi -0.36 +0.74 -0.19 1.96
a
Malaysia -0.11 -6.14 0.18 -3.31
Philippi -0.16 -2.18 1.22 -4.85
nes
S.Korea
Singapor -0.10 -2.02 -0.09 -1.19
e
Taiwan -0.18 -4.65 -0.87 15.36
Thailand -0.46 -4.75 0.05 -9.62
(Reporting by Roushni Nair in Bengaluru; Editing by Kim
Coghill)