The South Korean won on Thursday touched a two-week high to spur gains in regional currencies after data showed the Asian trade bellwether's industrial output data came in better than expected, pointing to some easing in global supply bottlenecks.
Sentiment got a boost from South Korea reporting a 5.1% seasonally adjusted increase in industrial production last month from October, beating a Reuters forecast of 2.5% as semiconductor shortages seemed to be improving.
The won, the Thai baht and Malaysia's ringgit, all rose about 0.3% each, as currencies of trade dependant Asia cheered the developments and the greenback weakened slightly.
"Korea's semiconductor output continued to post solid growth ... We think it could benefit if the lockdown in Xian, China, lasts longer," Barclays analysts wrote in a note.
Data suggests some easing of the automotive chip shortage, a phenomenon that was also reported in Japan, the analysts added, which "supports our view that supply-side bottlenecks may see more meaningful resolution in 2022".
However, on Thursday, Samsung Electronics and Micron Technology, two of the world's largest memory chip makers, warned that a COVID-19 lockdown in Xian could affect their chip manufacturing bases in the area.
South Korean equities fell 0.4% amid thin volumes on the last trading day of the year, with Samsung shares dragging the benchmark. KOSPI is set to close 2021 with gains of around 4%.
Chinese shares rebounded from a near 1% drop in the previous session, fuelled by gains in the tech sector even as the pandemic situation in the country worsened.
Bangkok shares edged higher, while stocks in Malaysia, Jakarta and Singapore shed between 0.1% and 0.3%, as low volumes amid end-of-year trading added some volatility to markets.
It was also the last trading day for currency and stock markets in Thailand and Indonesia, while Singapore will see a shortened session on Friday.
The baht is set to end the year as the worst-performing Asian currency with a 10.3% drop due to a delayed recovery in tourism, a key source of revenue for the Thai economy.
It would be the currency's second consecutive year of losses.
Philippines equity markets were closed for a holiday and will resume trade on Friday.
HIGHLIGHTS
** Indonesian rupiah among best performing currencies in 2021, eyes closing down 1.6% versus dollar; stocks up almost 10% ** Thai stocks set for gains of ~14%, rebounding from an 8% drop last year
** Shares of China Evergrande Group tumble after the embattled real estate developer did not pay offshore coupons due earlier this week