Thailand's baht held largely steady and stocks jumped after the Bank of Thailand (BOT) surprisingly cut its key interest rate on Wednesday, while the Philippine central bank lowered rates and Bank Indonesia maintained a status quo as expected.

The baht was last up 0.1%, while stocks in Southeast Asia's second-biggest economy rose as much as 1.6% to 1,488.59 points, its highest since September 2023.

The BOT reduced the one-day repurchase rate by 25 basis points to 2.25%. It had left the rate unchanged at a decade-high of 2.5% since September 2023.

Despite government support for the rate cut, including recent lobbying by Finance Minister Pichai Chunhavajia for accelerated economic growth, the baht remains the second-best performing currency in Asia this year, surpassed only by the Malaysian ringgit, said Daniel Tan, a fund manager at Grasshopper Asset Management.

"The BOT's latest stance may have come because of the high level of household debt," Tan said.

Bangko Sentral ng Pilipinas cut rates by 25 basis points and with inflation now below the 2%-4% target range, it is likely to continue its easing cycle that began in August, potentially implementing another reduction in December.

The Philippine peso was largely unchanged and stocks in Manila slipped by 0.3%.

The Indonesian central bank kept interest rates unchanged despite inflation falling to 1.84% last month, its lowest since 2021 and within the central bank's target range of 1.5% to 3.5%.

The Indonesian rupiah extended gains, advancing as much as 0.4% to 15,515 per US.dollar, while shares in Jakarta traded flat.

Meanwhile, the US dollar hovered near two-month peaks versus major peers, supported by expectations the Federal Reserve will proceed with modest rate cuts.

Recent monetary policy decisions across Asia suggest a trend towards rate reductions, following the Fed's lead in September, said Jeff Ng, head of Asia Macro Strategy at Sumitomo Mitsui Banking Corporation.

"This comes as inflation stays relatively within central bank targets, setting the stage for lower policy rates," he said.

As widely anticipated, the Monetary Authority of Singapore maintained its stance for the sixth consecutive time since April 2023 on Monday, while the Bank of Korea (BOK) reduced its policy rate by 25 basis points to 3.25% last week.

Stock markets in the region tracked a fall in US semiconductor names after chip equipment maker ASML cut its annual sales forecast.

The tech-heavy stock indexes of Taiwan and South Korea fell 0.9% and 1.21%, respectively, with industry giants Taiwan Semiconductor Manufacturing Co and Samsung Electronics spearheading the declines in their respective markets.

Source: The edge markets