BENGALURU: Asian shares hit multi-month highs on Wednesday as a softer US inflation print cemented expectations for more interest rate cuts by the Federal Reserve, though currencies fell, with Indonesian rupiah and Thailand’s baht among the top losers.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose more than 1%.

Taiwan stocks jumped more than 2% to four-month highs, while Indonesia shares climbed over 2%, reaching their highest levels since early-February.

Trading resumed after a two-day holiday in Indonesia, allowing investors to finally react to the weekend’s US-China trade pact over the weekend.

Equities in Thailand and Malaysia reversed earlier losses to trade flat.

The agreement in Geneva exceeded market expectations, with the United States and China sharply dropping extra retaliatory tariffs imposed on each other.

“There will be a close watch on how countries such as Japan, South Korea, Taiwan and Thailand fare in trade negotiations, as any successful deal on their part could be a boon for their respective currencies if capital inflows increase,” said Tim Waterer, a market analyst at KCM Trade.

Thailand’s finance minister said the country has promised US officials it would combat illegal transshipments through its ports, boost American imports and widen market access as part of efforts to avoid punitive tariffs.

Meanwhile, regional currencies were mostly subdued, with the Indonesian rupiah slipping as much as 0.5% to its lowest since May 2, while the Thai baht also dropped as much as 0.5%. South Korean won and the Philippine peso lost 0.3% each. The US dollar index, which measures the currency against six major counterparts, traded flat at 100.87 following its biggest decline in more than three weeks overnight—Reuters