EMERGING MARKETS-Asian markets tumble as rate jitters loom; U.S. jobs data in focus
By Roushni Nair
March 10 (Reuters) - The Indonesian rupiah and Thailand's baht led Asian currencies lower on Friday as investors braced for a U.S. jobs report that could provide cues on the size and pace of the Federal Reserve's -term interest rate increases.
The rupiah IDR=, one of the best-performing currencies this year, fell as much as 0.4% and is on track for a fifth consecutive weekly loss. The baht THB=TH weakened similarly, to give up more than 1% in value this week.
Weekly jobs data released on Thursday prompted market participants to expect the Fed might be less aggressive than previously thought, which would be a for the dollar.
However, given the uncertainty ahead of the U.S. -farm payrolls data, investors pulled back from riskier Asian assets.
The February report is due later in the day, with payrolls expected to show an increase of 205,000 after surging by 517,000 in January, according to a Reuters survey of economists.
Thursday's data showed U.S. jobless claims rose last week by the most in five months, but the were softer than expected.
Futures pricing implies a 50% chance that the Fed will raise rates by 50 basis points this month, compared with a 70% probability before the data release. FEDWATCH
Foreign investors sold $1.5 billion in Asian market assets during February as China's economic growth optimism was overshadowed by concerns that the Fed funds rate will end up surging higher than expected, Khoon Goh, head of Asia research at ANZ said in a .
"We do expect a repeat of last year's massive portfolio outflows from Asia despite some volatility in the term, especially if Asian central banks are forced to do more due to a higher terminal Fed funds rate," Goh added.
Analysts at Westpac expect market participants to gain confidence and search for opportunities going forward helping capital flow from the U.S. dollar and into Asia, as Fed's policy is seen to take effect, reining in inflation.
In Malaysia, former Prime Minister Muhyiddin Yassin was charged with abuse of power and money laundering over projects launched under his premiership, and accusations that he said were politically motivated.
The Malaysian ringgit MYR= strengthened by 0.1%, though the currency is eyeing its sixth straight week of losses.
Separately, Thailand's finance minister said Southeast Asia's second-largest economy is expected to grow by 3% to 4% this year, driven by a rebound in the vital tourism sector.
Next week, the Bank of Indonesia is expected to keep the policy interest rate unchanged, while India's consumer price index for February is seen to be moderating, according to Barclays.
Equity markets across Southeast Asia were a sea of red, with shares in Mumbai .NSEI leading the sell-off, on track for their worst day since Feb. 22 and losing 1.5% this week.
Stocks in Manila .PSI, Kuala Lumpur .KLSE, and Seoul .KS11 slipped between 0.8% and 1.5%. Shares in China .SSEC and Taiwan .TWII retreated over 1.3% each.
** Indonesian 10-year benchmark yields fall 1.9 basis points to 7.020%
** South Korea Jan. current account logs record monthly deficit
** Fed funds rate is projected to peak just below 5.5% by July
Asia stock indexes and currencies at 0648 GMT
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(Reporting by Roushni Nair in Bengaluru; editing by Eileen Soreng)