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Most Asian stocks and currencies rose on Friday against a softer US dollar, as strong economic data from China underpinned expectations that Beijing will set an ambitious 2023 growth target at its annual parliament meeting this weekend.

Equities in Mumbai jumped 1.5% to lead gains in the region.

Stocks in Manila climbed 0.8%, although they were bound for a sixth consecutive weekly loss.

South Korea’s benchmark index rose 0.3%, while Singapore shares and equities in Taipei edged 0.1% higher.

Markets are keenly awaiting China’s annual legislative meeting, scheduled on Sunday, that will implement the biggest government reshuffle in a decade and set economic targets.

“A higher growth target can nudge China’s growth back to its potential path,” ANZ analysts said in a note.

“Government officials still hold the view that China’s potential growth is in the 5%-6% range. Our calculation suggests that a growth rate of 5.5% can return China’s GDP (gross domestic product) index to its potential path by the end of this year.”

Recent data from China suggests that economic recovery is steady in Southeast Asia’s biggest trading partner following the easing of strict COVID-19 curbs in December, boosting investors’ appetite for riskier assets.

Asian currencies decline on Fed rate hike jitters

“Better than expected Caixin services PMI (purchasing managers’ index) … continue to ignite hopes of China reopening trade and this is seeing a positive spill over to risk sentiments,” analysts at OCBC said in a note.

Adding to the latest string of strong data, the country’s services sector expanded at the fastest pace in six months in February, driving a solid increase in employment.

The yuan appreciated 0.3% and was set to mark its best week since mid-January. Stocks in Shanghai gained 0.4%.

The South Korean won strengthened by 1%, while India’s rupee rose 0.4%. The Singapore dollar and Thailand’s baht firmed 0.1% each.

The Philippine peso appreciated 0.5% after the country’s central bank governor said rates might be hiked by 50 basis points (bps) in the “worst-case scenario” of inflation rising above 9%.

Inflation in January hit a 14-year high of 8.7%, prompting Bangko Sentral ng Pilipinas’ to say it was likely to raise rates one more time this year, after having hiked by 50 bps last month.

Meanwhile, Atlanta Federal Reserve President Raphael Bostic said on Thursday he favoured “slow and steady” interest rate hikes by the central bank to reduce the risk of damaging the economy, despite new figures indicating the strength of the labour market.

The dollar index eased 0.2% to 104.72, as traders tried to gauge the path for Fed’s policy.

That further lifted risk sentiment.

Separately, Indonesia’s poll body on Thursday vowed to forge ahead with organising next year’s presidential election, defying a surprise ruling by a district court to halt all election processes for more than two years.

Stocks in Jakarta retreated 0.6%.

Highlights:

** Activity in India’s dominant services sector expanded at the fastest pace in 12 years in February on strong demand as price pressures eased further.

** China’s central bank will adjust monetary policy in a timely and appropriate manner to support a nascent recovery in the economy.

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