SINGAPORE - Asian currencies and shares surged on Thursday after dovish comments by US Federal Reserve Chairman Ben Bernanke cast some doubt on just how soon the Fed would start slowing the pace of its monetary stimulus.
Asian equities and currencies have faced selling pressure over the past two months, as speculation mounted that the Fed may begin scaling back its US$85 billion (S$109 billion) a month bond-buying programme as early as September.
But Bernanke's remarks, which played down the strength of last week's June payrolls report, left market players wondering whether the Fed would start reducing its bond purchases quite so soon.
Thai equities jumped 3 per cent, pulling away from a six-month low set in late June, while Indonesian stocks climbed 2.4 per cent and shares in Singapore gained 1.6 per cent .
Emerging Asian currencies also rallied. The Singapore dollar rose 0.7 per cent and hit a three-week high of 1.2601 against the US dollar, after having slumped to a 13-month low of 1.2860 earlier this week.
The Thai baht climbed 0.8 per cent to 31.00, pulling away from a trough near 31.50 struck earlier this week, its lowest level since last August.
Analysts, however, were cautious about the outlook for emerging Asian currencies, saying that the Fed still seems likely to start reducing its bond purchases later this year, even if the exact timing is unclear.