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EMERGING MARKETS-Indonesia's rupiah at near 5-month low on rising U.S. yields

    * Indonesia, Malaysia, Philippine shares down over 1.5%
    * U.S. dollar on track for best month since 2016
    * China March PMI expands at the quickest pace in three
months
    * Rupee declines further

    By Nikhil Nainan
    March 31 (Reuters) - Indonesia's rupiah tumbled to its
weakest level in nearly five months on Wednesday, as rising U.S.
bond yields sapped risk appetite for one of the highest-yielding
emerging market currencies and pounded the region.    
    Stocks in Jakarta and Kuala Lumpur and
Manila fell more than 1.5% and led declines across the
continent.
    The 10-year yield was at 1.7211%, ahead of U.S.
President Joe Biden's infrastructure spending announcement.
    Later in the day, Biden is set to outline how he intends to
pay for a $3 trillion to $4 trillion infrastructure plan, which
could boost the U.S. recovery.
    "The additional spending boost could further support the
U.S. dollar," Mizuho said in a note. 
    The dollar is on track for its best month since 2016,
as compared with monthly declines set for many Asian emerging
currencies, including the rupiah and ringgit. 
    The International Monetary Fund said strong U.S. growth
could help a global economic recovery, but may also cause
tighter financial conditions and trigger significant outflows
from emerging countries.
    Indonesia's central bank governor said the country has ample
foreign reserves to ensure the rupiah is stable and intends to
continue to keep policy loose to support the recovery.

    "We see risks that the rupiah could soften further for a
period of time," said Wei Liang Chang, an FX strategist at DBS. 
    "Bank Indonesia may manage rupiah depreciation to limit
volatility, but absent a rebound in inflation, policy is likely
to remain unchanged."
    Jakarta's stock market was also set for its worst month
since September after a strong February. That drop is weighing
on the first quarter in which it is set for a small decline
compared with its best showing since 2009 in the December-ended
quarter.
    In Malaysia, stocks suffered their sharpest fall in nearly
three months, falling as much as 1.8%. They were set to end
three straight quarters of gains. 
    The central bank expects Malaysia's economy to rebound in
2021, compared with a 5.6% contraction - its worst since the
Asian Financial Crisis in 1998 - in 2020. 
    Data showing China's manufacturing activity expanding at its
quickest pace in three months in March did little to support the
region. Shanghai stocks fell 0.8%, while the yuan
 gained 0.2%.
    In India, where COVID-19 cases are surging, stocks
fell nearly 1%.  The rupee weakened 0.5% to its lowest
in about a month, following a sharp drop on Tuesday.

            
    HIGHLIGHTS:
    ** Glove makers Top Glove Corp Bhd and Hartalega
Holdings Bhd led declines in Malaysia
    ** Indonesian 10-year benchmark yields rise 2 basis points
to 6.814%
    ** Asian countries scramble for vaccine supplies after India
export curbs
    
  Asia stock indexes and currencies at 0630 GMT
 COUNTRY      FX RIC      FX       FX     INDEX    STOCKS   STOCKS
                          DAILY %  YTD %           DAILY %  YTD %
 Japan                    -0.33    -6.75           -0.86    6.32
 China                    +0.16    -0.51           -0.61    -1.08
 India                    -0.16    -0.59           -0.73    5.40
 Indonesia                -0.48    -3.44           -1.81    -0.29
 Malaysia                 -0.07    -3.18           -1.73    -2.81
 Philippines              -0.04    -1.17           -1.57    -9.76
 S.Korea                  +0.16    -4.03           -0.28    6.54
 Singapore                +0.08    -1.92           -0.32    11.85
 Taiwan                   -0.04    -0.16           -0.75    11.53
 Thailand                 -0.35    -4.43           0.16     9.85
 
    

 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by
Simon Cameron-Moore and Amy Caren Daniel)
  
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