South Korea leads Asia stock gains on auto boost; currencies range-bound

South Korean shares jumped nearly 3% on Tuesday after steep losses in the previous session as gains in heavyweight auto shares provided a boost, with investors also eyeing prospects for more stimulus to support an economic recovery.

Regional equities gained further by early afternoon with MSCI's broadest index of Asia-Pacific shares outside Japan up more than 1%. Bourses in India, Taiwan and Thailand gained between 1% and 2%.

South Korea's KOSPI jumped 2.6% recovering from its worst fall in near three months on Monday. The benchmark index has surged more than 7% so far this month following a 30% jump in 2020.

Automaker Hyundai Motor and its affiliates led gains on the benchmark index, while heavyweight Samsung Electronics also rebounded, a day after its group leader was sentenced to a 30-month jail term in a bribery case.

Adding to the positive mood, South Korea's vice finance minister also said the government will soon unveil additional measures to revitalise consumption.

Currency traders looked ahead to US Treasury Secretary nominee Janet Yellen's Senate testimony later in the day for clues on the incoming Biden administration's policies and its implications for the US dollar.

Yellen is expected to affirm the United States' commitment to market-set currency rates and make clear that the US does not seek a weaker dollar, the Wall Street Journal reported.

"Yellen's comments on fiscal policy will perhaps be of more interest to investors, which indirectly could encourage USD shorts on the view that monetary and fiscal policy are singing from the same song sheet - maximum policy overdrive," said Stephen Innes, chief global market strategist at trading firm Axi.

Emerging Asian currency and bond markets have trailed as the prospect of trillions more in US fiscal spending and borrowing has fuelled a rise in US government bond yields, weakening the attraction of the region's higher-yielding markets.

The South Korean won and the Singapore dollar gave up early gains to trade flat, while the Malaysian ringgit also clung to a tight range as expectations rose for an interest rate cut by the central bank on Wednesday.

Taiwan's dollar strengthened 1.8% ahead of the release of export orders data on Wednesday, which is likely to show orders climbed for a 10th straight month, according to a Reuters poll.

Both South Korea and Taiwan, which have a large presence in the semiconductor industry, have seen a solid rebound in exports as a global shift to work-from-home during the pandemic boosted demand for chips used in electronic products.