Asian currencies were largely flat on Tuesday as investors placed cautious bets ahead of the US inflation data while the Thai baht held a narrow lead, aided by talks on bilateral travel bubble deals with Malaysia and China to boost its economy.

The baht firmed 0.2% and stocks rose 0.3% as the government worked to help the tourism-reliant economy recover in the face of rising new COVID-19 cases, with traders looking forward to a central bank policy meeting on Wednesday.

Poon Panichpibool, a market strategist with Krung Thai Bank said the market players could feel more nervous ahead of the US CPI data on Thursday and as the dollar index rose higher.

Souring sentiments, the Chinese index slumped to a 19-month low on Tuesday as investors fretted over the prospect of the US government adding more Chinese entities to the export control list.

"Moreover, sell-off in Chinese stocks both A-shares and H-shares also hurt overall market sentiments which also contribute to weakness across Asian currencies this afternoon," Panichpibool added.

China's yuan inches higher but gains capped by weak stocks

However, the US dollar and euro had eased overnight after European Central Bank President Christine Lagarde calmed market expectations of a quick hike in interest rates and as markets awaited this week's inflation data.

"Growing bets of a 50 basis-point hike came after the US non-farm jobs report and market participants will continue to seek validation from the upcoming key US CPI data...to see if it is warranted in the March's Fed meeting," a strategist with IG said.

The South Korean won rose 0.3%, leading gains after President Moon Jae-in said the country's economic policies should focus on stabilising consumer inflation and managing household debt as higher interest rates have made repayments more onerous.

Meanwhile, a Reuters poll showed Indonesia's central bank was expected to raise rates faster as concerns mount about a weaker rupiah.

Indonesia's rupiah rose 0.1% while stocks pared some losses to drop marginally by 0.1%.

Singapore's benchmark, the Straits Times index was up 0.81%, outperforming most of its peers.

The latest SGX fund flow data recorded the fifth consecutive week of net institutional inflows, which marks the largest weekly inflow since March 2021.

Highlights:

** Indonesian 10-year benchmark yields are up 0.89 basis points at 6.5%

** Korean stocks pared early gains, up 0.1% as US sanctions against some China firms weigh