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Taiwan, Korea, Japan stocks hit record highs

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Fed cut bets fuel EM rally, tech leads the charge

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Taiwan outperforms; Indonesia bond spread widens

(Updates for afternoon trade)

By Roushni Nair

Sept 11 (Reuters) - Most Asian shares extended gains on

Thursday, with benchmark indexes in Japan, Taiwan, and South

Korea scaling record highs as investor optimism intensified

ahead of a widely anticipated U.S. Federal Reserve interest rate

cut next week.

Taiwan's benchmark index rose as much as 1.4% to an

all-time high of 25,541, driven by a 2.5% jump in chipmaker TSMC

. South Korea's Kospi also scaled a record

peak, gaining 0.9%.

Both indexes marked record high levels for a second

consecutive day, with South Korea on track for an eighth session

of gains and Taiwan rallying for the seventh.

Japan's Nikkei also climbed to an all-time high of

44,251.65, echoing an overnight Wall Street rally.

Investor sentiment was buoyed by a surprise drop in U.S.

producer prices, reinforcing expectations of a Fed rate cut next

week. Traders are now pricing in a 92% chance of a

25-basis-point cut, with an 8% probability of a larger 50-bp

move, according to CME Group's FedWatch tool.

However, the equity euphoria contrasted with currency

markets, where the Philippine peso, South Korean won

, and Thai baht led declines, each falling

more than 0.3%.

The U.S. dollar index traded marginally higher by

0.1% on easing bets and encouraging inflation signals.

Singapore's STI benchmark index was flat after

hitting record levels in the previous session, while equities in

Jakarta and Bangkok rose more than 0.5%, each.

Traders now await the U.S. consumer price data, due later in

the day, to firm up their rate-cut expectations.

Tech sentiment received an additional lift from Oracle Corp ( ORCL )

, whose upbeat cloud outlook added momentum to the

sector, analysts at Bell Potter Research noted.

Meanwhile, the Taiwan dollar held firm and remains

the region's top-performing currency this year, up more than 8%.

Analysts at Bank of America said that the currency's rally

stalled in July and August due to equity outflows, but with Fed

rate cuts largely priced in, Taiwan's record trade surplus and

renewed equity inflows could fuel a second leg of gains.

In Indonesia, markets stabilised after the abrupt dismissal

of Finance Minister Sri Mulyani Indrawati earlier this week.

Indonesia's 1-10 year bond spread widened above 120 bps this

month, the highest since January 2023.

Stocks in Jakarta advanced 0.8% and the Indonesian

rupiah was flat.

The country may revise its $236 billion budget proposal for

2026, newly appointed Finance Minister Purbaya Yudhi Sadewa said

late Wednesday.

HIGHLIGHTS:

** Thai consumer confidence falls in August

** Malaysia's July industrial production up 4.2%

year-on-year

Asia

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COUNTRY FX RIC FX FX INDE STOCK STOCK

DAILY YTD X S S YTD

% % DAILY %

%

Japan -0.16 +6.4 China 8 EC>

India -0.24 -3.0 Indones -0.06 -2.2 Malaysi -0.24 +5.8 Philipp -0.39 +1.4 S.Korea 0 11>

Singapo -0.09 +6.3 Taiwan -0.04 +8.1 Thailan -0.31 +7.7