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Taiwan dollar set for strongest day ever

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Southeast Asian currencies set for weekly gains

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Malaysia c.bank policy decision next week

(Updates as of 0733 GMT)

By Rishav Chatterjee

May 2 (Reuters) - The Taiwan dollar and stocks in Taipei

soared on Friday, leading a rally across Asian markets as signs

of easing U.S.-China trade tensions sparked a wave of risk-on

optimism after weeks of market turbulence.

Taiwan's currency strengthened 3.8% on Friday,

touching a 15-month high in its biggest ever daily gain on

record, LSEG data showed.

The spike was a result of retail investors repatriating

overseas investments and a wave of exporters panic-selling the

U.S. dollar, a local trader in Taiwan said.

Equities in Taipei surged 2.7%, hitting their

highest level since the end of March and recouping all of their

losses since U.S. President Donald Trump slapped levies across

the globe and kicked off a trade war.

"The faster-than-expected pace of Taiwan dollar appreciation

caught many market participants off guard, prompting a rush to

convert USD into local currency," said Christopher Wong,

currency strategist at OCBC.

"Recent gains in the Taiwan dollar have also been catalysed

by prospects of dialogue between the U.S. and China."

The east-Asian trade-reliant island on Wednesday reported

its economy growing at its fastest pace in a year and upgraded

its annual growth estimates.

Investors also assessed indications of possible trade talks

between the world's two largest economies after Beijing's

commerce ministry said that Washington has repeatedly expressed

its desire to negotiate on tariffs.

"Traders are identifying more upside potential in Asian

economies now that the White House seems to be more open to

trade negotiations," said Tim Waterer, market analyst at KCM

Trade.

"Currencies such as the Taiwan dollar, baht and

Singapore dollar have been among those to benefit."

All currencies in emerging Asia gained on Friday, with the

Indonesian rupiah and Thai baht appreciating

more than 1% each.

The rupiah was set for its biggest one-day gain since

September 2024 and touched its highest level since March 18.

The offshore yuan strengthened to its strongest

level since April 4. The onshore yuan was not trading

on account of China markets being closed due to a public

holiday.

Regional currencies were also set for weekly gains against

the U.S. dollar, with the rupiah, the Singapore dollar,

the Malaysian ringgit, and the Philippine peso

adding between 0.6% and 1.4%.

On the data front, Bank Negara Malaysia is set to meet next

week for its overnight policy rate decision. Traders are growing

more confident that Malaysia's central bank (BNM) will succumb

to mounting economic pressure from the global trade war and

reduce interest rates.

HIGHLIGHTS:

** Indonesia's April inflation rate rises to eight-month

high

** Thailand finance ministry cuts 2025 growth forecast to

2.1%

Asian

stocks

and

currenci

es as of

0733 GMT

COUNTRY FX RIC FX FX INDE STOCKS STOCKS

DAILY YTD % X DAILY YTD %

% %

Japan +0.14 +8.24 China EC>

India +0.59 +1.93 Indonesi +0.94 -2.13 Malaysia +0.84 +4.49 Philippi +0.48 +4.44 S.Korea 11>

Singapor +0.51 +4.69 Taiwan +3.36 +5.83 Thailand +1.18 +3.56