By David Lawder and Andrea Shalal

WASHINGTON (Reuters) -Finance leaders from the Group of Seven industrial democracies on Wednesday condemned Iran's attack on Israel and pledged to continue work on "all possible avenues" to harness frozen Russian sovereign assets to aid Ukraine.

In a joint statement issued after a meeting, the G7 finance ministers and central bank governors said they would "ensure close coordination of any future measure to diminish Iran's ability to acquire, produce, or transfer weapons to support destabilizing regional activities."

The ministers met on the sidelines of the International Monetary Fund and World Bank spring meetings in Washington and said that they view risks in the global economy as "more balanced" amid recent resilience to multiple shocks, with inflation receding.

"Central Banks remain strongly committed to achieving price stability and will continue to calibrate their policies in a data-dependent manner. Price and financial stability are a pre-requisite for sustainable and balanced growth," the G7 officials said.

But the group said there were significant geopolitical risks to the outlook, primarily from Russia's war in Ukraine and conflict in the Middle East, which "could affect trade, supply chains and commodity prices."

The G7 finance officials said they were strongly committed to help Ukraine meet urgent short-term financing needs as it struggles against Russia's invasion, including harnessing extraordinary revenues stemming from frozen Russian assets.

"We reaffirm our determination to ensure that Russia pays for the damage it has caused to Ukraine. Russia’s sovereign assets in our jurisdictions will remain immobilized until then, consistent with our respective legal systems," the G7 officials said.

The statement did not include a specific plan for the assets, but said they would "continue working on all possible avenues by which immobilized Russian sovereign assets could be made use of to support Ukraine" with a view to presenting options to G7 leaders at a June summit in Italy.

'WORK IN PROGRESS'

Earlier on Wednesday, Deputy U.S. Treasury Secretary Wally Adeyemo said the G7 discussions on frozen Russian sovereign assets, estimated at about $300 billion, were still a "work in progress."

Adeyemo told an event hosted by the Semafor news outlet that finance ministers were doing technical work to come up with options that still include building a strong legal foundation for outright seizure of the assets.

"We're talking through a number of different options. One of them is seizure, but another is collateralizing, or even using the windfall profits or the interest from these assets to fund a loan," Adeyemo said.

Because the bulk of the assets are being held in Europe, it was important that the U.S. work closely with European allies on the issue, Adeyemo said.

French Finance Minister Bruno Le Maire said on Wednesday that the G7 needed to be in a position to harness the interest earned on the assets.

"These revenues are estimated between 3 billion to 5 billion euros per year, depending on the level of the interest rates," Le Maire said. "So our proposal is to better understand and better define how these 3 to 5 billion euros could be used over the next month to help Ukraine and to help the Ukrainian government. So let's focus on that question."

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) - Foreign holdings of U.S. Treasuries surged to a record in February, its fifth straight monthly rise, Treasury Department data released on Wednesday showed.

Holdings totaled $7.965 trillion, up from a revised $7.945 trillion in January. Treasuries owned by foreigners rose 8.7% from a year earlier.

Holdings of Treasuries grew the most in Belgium, by $27 billion, to hit $320 billion. Japan, the largest non-U.S. holder of Treasuries, increased its U.S. government debt to $1.167 trillion, the largest since August 2022 when the country's holdings were at $1.196 trillion.

Investors have been alert to the threat of Japanese intervention in the currency market to boost the yen, which plunged to a 34-year low of 154.79 per dollar on Tuesday.

The Bank of Japan intervened three times in 2022, selling the dollar to buy yen, first in September and again in October as the yen slid toward a 32-year low of 152 to the dollar.

In September and October 2022, Japan's Treasury holdings declined $131.6 billion from $1.196 trillion in August.

China's pile of Treasuries also fell in February to $775 billion, data showed. The monthly decline of $22.7 billion was the second biggest among the 20 major countries on the Treasury's list.

Holdings of Treasuries by China, the world's second largest economy, have been declining, reaching $763.5 billion in February, the lowest since March 2009.

Britain listed its Treasury holdings at $700.8 billion, up about $9 billion from January.

The benchmark 10-year Treasury yield started February at 3.863% and ended the month at 4.252%, up nearly 39 basis points. Yields rose as a slew of solid economic data was released that month, reflecting expectations that the Federal Reserve will delay cutting interest rates.

Major U.S. asset classes had inflows during the month, the data showed.

On a transaction basis, U.S. Treasuries posted inflows of $88.8 billion, up from $46.3 billion in January.

Foreign buying of U.S. corporates and agencies persisted in February, with inflows of $52.7 billion and $3.7 billion, respectively.

U.S. equities showed a minor inflow of $400 million, compared with outflows of $15.4 billion in January.

Overall, net foreign acquisitions of long- and short-term securities, as well as banking flows, showed a net inflow of $51.6 billion in February, up from outflows of $30.8 billion the previous month, Treasury data showed.

LONDON (Reuters) - Global property and casualty insurers showed "alarming" underwriting losses in 2022 as natural catastrophes increased and risk models failed to keep up, a report from consultants Capgemini said on Wednesday.

Global insured losses from natural catastrophes have been surpassing $100 billion annually in recent years, driven higher by issues such as winter storms. Industry sources see climate change and increased building in exposed areas as contributing to the losses.

The insurers' global combined ratio, a measure of claims and expenses against premium revenue, was 103% in 2022, Capgemini said. A level above 100 indicates an underwriting loss. Property insurers have suffered three years of underwriting losses in the past four years, the report said.

Only 27% of insurance executives surveyed believe their firms have advanced predictive modelling capabilities.

"Accurate risk prediction and pricing are becoming increasingly challenging and leading to insurability concerns," Anirban Bose, Capgemini financial services strategic business unit CEO, said in the report.

The report gathered information from 18 insurance markets, including Britain, Hong Kong, India and the United States, through polling of insurance customers and interviews with insurance executives and underwriters.

By Andrea Shalal and David Lawder

WASHINGTON (Reuters) -U.S. Treasury Secretary Janet Yellen on Tuesday warned that the U.S. intends to hit Iran with new sanctions in coming days over its unprecedented attack on Israel, and these actions could seek to reduce Iran's capacity to export oil.

"With respect to sanctions, I fully expect that we will take additional sanctions action against Iran in the coming days," Yellen said told a news conference on the sidelines of the International Monetary Fund and World Bank spring meetings in Washington.

"We don't preview our sanctions tools. But in discussions I've had, all options to disrupt terrorist financing of Iran continue to be on the table," Yellen added.

She said that the Treasury and State Department have taken previous action to contain Iran's "destabilizing" behavior by diminishing its ability to export oil.

"Clearly, Iran is continuing to export some oil. There may be more that we could do. I don't want to preview our actual sanctions activities, but certainly that remains in focus as a possible area that we could address."

Treasury was working to enlist the aid of China, G7 partners and other major global suppliers to erode Iran's ability to continue to export oil and to get the microelectronics needed for the drones it used to attack Israel and was selling to Russia, a senior Treasury official told reporters.

The official said a jump in oil prices had been driven mainly by geopolitical uncertainty, not U.S. sanctions, and noted that past sanctions had not led to oil price increases.

"We're going to have conversations with all major suppliers around the world. That includes countries in the G7; that includes China. All of these countries have to play a role in constraining Iran's ability to get access to the goods they are using to build weapons," the official said.

In prepared remarks, Yellen said Iran's attack on Israel last weekend and its financing of militant groups in Gaza, Lebanon, Yemen and Iraq threatened stability in the Middle East and could cause economic spillovers.

The United States is using financial sanctions to isolate Iran and disrupt its ability to fund proxy groups and support Russia's war in Ukraine, Yellen said.

Treasury has targeted more than 500 individuals and entities connected to terrorism and terrorist financing by the Iranian regime and its proxies since the start of the Biden administration in January 2021, Yellen said.

That has included targeting Iran’s drone and missile programs and its financing of the Palestinian militant group Hamas, the Houthis in Yemen, Hezbollah in Lebanon, and Iraqi militia groups, she said.

"From this weekend’s attack to the Houthi attacks in the Red Sea, Iran’s actions threaten the region’s stability and could cause economic spillovers," Yellen said, without giving details.

Iran on Saturday launched more than 300 drones and missiles against Israel, its first direct attack on the country, in retaliation for a suspected Israeli air strike on its embassy compound in Damascus on April 11 that killed elite military officers.

Israel's military said that it shot down almost all the drones and missiles, and that the attack caused no deaths, but the situation has increased fears of open warfare between the longtime foes.

In Gaza, more than 33,000 Palestinians have been killed in the Israeli offensive launched against Hamas after the group attacked Israel on Oct. 7, killing 1,200 people and taking 253 hostages, according to Israeli tallies.

Yellen said Washington was continuing to use economic tools to pressure Hamas, but said Treasury was emphasizing that its sanctions should not impede life-saving aid.

She called for urgent action to end Palestinian suffering in the narrow enclave, noting that Gaza's entire population of more than 2 million people was facing acute food insecurity and that most of the population had been displaced.

"It is incumbent on all of us here at these meetings to do everything in our power to end this suffering," she said.

Yellen noted that Washington was also using sanctions to target extreme settler violence in the West Bank, while working to ensure a functioning banking system there and supporting IMF programs in Jordan and Egypt.

By Rae Wee and Stefanno Sulaiman

SINGAPORE/JAKARTA (Reuters) - Indonesia's economy was primed for monetary easing later this year, but an unwelcome plunge in its currency is complicating matters for Bank Indonesia and could force it to grudgingly raise rates as early as next week.

As Indonesian markets returned from a long Eid al-Fitr holiday this week, the rupiah sank to a four-year low against a dollar buoyed by expectations that a hot U.S. economy will force the Fed to keep rates higher for longer.

As it slid past the psychological level of 16,000 to a dollar, stacking up a 5.25% loss for the year, some market participants felt Bank Indonesia (BI) might need to do something as drastic as a rate rise to arrest the slide.

BI is the only central bank in the world whose main mandate is currency stability.

Through 2023 and so far this year, it has used a range of intervention tools to keep the rupiah reined in as the dollar soared. Until last month, it was even expected to be among the first central banks in emerging Asia to start cutting rates.

As BI prepares to review policy on April 23, the thinking is changing. A hike would be its first since October.

"I think the risk of a hike is not small. I wouldn't put it as a baseline because they did hike previously, but I would think it's not small," said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.

"I think definitely, the rhetoric will have to turn a bit more hawkish in order to lend support to the currency."

A rate rise would help bump up the yields that have been the rupiah's big appeal historically, as well as the cause of its frequent bouts of volatility. That's even as tame inflation and growth concerns do not call for one.

Once a popular carry-trade currency, Indonesia's high-yielding bond market has lost appeal due to currency volatility and the wafer-thin spreads it offers over dollar markets.

Spreads between 10-year U.S. Treasuries and Indonesian government bonds were as wide as 7.5 percentage points four years ago. Now they are two points.

Foreigners hold just 14% of outstanding Indonesian government securities, while back in December 2020 they owned a quarter.

MORE NEEDED

Bank Indonesia has been using a unique mix of direct rupiah buying in the spot foreign exchange and domestic non-deliverable forwards (DNDF) markets as well as purchases of government bonds to stem the rupiah's decline.

To be sure, the efforts have helped keep the rupiah from falling as much as peers such as the Korean won.

BI's intervention in the DNDF market has also tamped down expectations of rupiah depreciation, with markets expecting a mere 0.5% decline in the next six months.

Edi Susianto, BI's head of monetary department, told Reuters the central bank has been working with "relevant stakeholders" to prevent excessive rupiah volatility, for instance by staggering the demand for dollars from state-owned energy company Pertamina.

"So far the coordination with Pertamina is going very well. If the demand is for later, then it is recommended to not enter the FX market for now," said Susianto.

The central bank spent about $6 billion in the first quarter alone, which left its foreign exchange reserves at $140.4 billion at the end of March.

But BI could be close to exhausting all its options, particularly as Fed rate cut bets recede.

Daniel Tan, portfolio manager at Grasshopper Asset Management, said his fund has bought dollar-denominated bonds issued by Indonesian state firms this year, rather than risking exposure to rupiah assets.

Some investors are betting on eventual Fed rate cuts later this year giving Indonesia's rupiah some reprieve.

Jerome Tay, investment manager of Asia fixed income at abrdn, said the firm is overweight on both rupiah on a relative value basis and Indonesian government bonds, citing reasons such as tame inflation, the government's cash surplus and expectations for low volatility.

"Foreign positioning is still very light and bonds are well supported by domestic investors," he said, adding he expects foreign money to return when the Fed starts easing policy.

For now, a foot-dragging Fed continues to cast a cloud.

Bank of America's Asia and ASEAN economist Kai Wei Ang has pushed out expectations for BI's first rate cut to December from June, aligning with the Fed.

"Any BI hike in response to sharp currency depreciation pressure cannot be entirely ruled out, but it could be delivered in a manner to 'surprise' the market and justified on the basis of upside risks to inflation from imported inflation and energy."

By Francesco Guarascio

HANOI (Reuters) - Vietnam has mounted an "unprecedented" rescue of Saigon Joint Stock Commercial Bank (SCB), a lender engulfed in the nation’s biggest financial fraud, according to three bank documents and new official information provided to Reuters by a person with access to the documents.

"Without lending, SCB will collapse," according to the new information provided to Reuters. "If the lending continues, the national treasury will gradually dry up."

Reuters is not identifying the source more specifically due to the sensitivity of the matter.

The new information also described the situation as “unprecedented” for the massive volume of the cash injections, the complexity of the operation and the scale of existing and potential damage to Vietnam’s financial system.

Reuters was unable to establish whether the conclusions about the impact on state coffers were broadly shared by other officials currently involved with monitoring SCB.

Vietnam's public debt was stable last year at 37% of gross domestic product, while the budget deficit widened slightly to 4.4% of GDP. Foreign reserves were around $100 billion at the end of the year, according to the central bank. That is up from about $90 billion at the end of October, according to the independent regional watchdog ASEAN+3 Macroeconomic and Research Office.

As of the start of April, the Southeast Asian nation’s central bank had pumped $24 billion in "special loans" into SCB, according to one of the bank documents seen by Reuters, which provides daily updates since March 29 on overall injections from the central bank.

Lending has slowed slightly but averaged more than $900 million a month in the past five months, according to that document, a second document with updates from March 15 to March 20, and a third document from November with monthly updates from October 2022 to October 2023.

The central bank did not reply to requests for comment about the rescue effort. The finance ministry referred a question to the central bank. SCB initially told Reuters it would circulate the news agency's request for comment, but did not respond to subsequent emails. An SCB official declined to comment when contacted by phone.

RUN ON BANK AFTER TYCOON'S ARREST

The State Bank of Vietnam's previously unreported cash injections into SCB amount to 5.6% of the nation's annual economic output, or about one-fourth of Vietnam's foreign-exchange reserves.

The central bank placed SCB under its supervision to stem a run on the bank sparked by the October 2022 arrest of real estate tycoon Truong My Lan. Since then, SCB has been using the injections to cover cash withdrawals, according to one of the bank documents, which SCB sent to the central bank in November to account for its use of the loans.

After the central bank stepped in, SCB's deposits plunged 80% to about $6 billion by December 2023, according to the new official information from the source. SCB could run out of deposits by mid-year at the current pace, and bad loans had surged to 97.08% of SCB's credit balance as of October, it said.

    Lan, the tycoon whose October 2022 arrest sparked the bank run, was sentenced to death on Thursday after being found guilty of masterminding the fraud. She had pleaded not guilty to embezzlement and bribery for allegedly siphoning off $12.5 billion in loans from SCB to shell companies while effectively controlling SCB through proxies.

Lan, formerly a prominent figure in Vietnamese finance, will appeal the verdict of the People's Court of Ho Chi Minh City, one of her lawyers said.

Despite the official support, as of December SCB continued to face liquidity problems and at times struggled to settle payments on time when its customers transferred money to other banks, and to process payments via the country's main clearing system, according to the new information. This affected customer "psychology" and created risks to the entire banking and financial system, it said.

The central bank had provided SCB, previously one of the country's largest commercial lenders by deposits, with 592.7 trillion dong ($23.72 billion) in "special loans" as of April 2, according to a recent update produced by the bank on the matter, seen by Reuters.

That was up from 478 trillion dong at the end of October, according to the SCB document that was sent to the central bank. That indicates injections of 23 trillion dong ($910 million) a month since November.

This has slowed from the initial average of $3.7 billion a month the central bank initially injected in October and November 2022 and the monthly pace of nearly $1.2 billion from then until October 2023, the bank document shows.

BANK RESTRUCTURING SOUGHT

Vietnam's banking sector is already facing heightened risks from prolonged turmoil in the real estate sector. The fraud prosecution is part of the authorities' "blazing furnace" anti-corruption campaign, which triggered the real estate crisis, weighing on the economy and clouding the outlook for banks.

The central bank and the government have repeatedly sought help for SCB from the private sector, specifically calling on foreign investors, state media say, despite restrictions such as a 30% cap on combined foreign ownership of Vietnamese banks.

Late last year the central bank assigned private real estate company Sungroup to craft a plan to restructure SCB, according to the recent information from the source and three people familiar with the plan. Sungroup did not reply to a request for comment.

Reuters could not determine whether the Sungroup plan has been approved.

Any restructuring plan would hinge on the evaluation of real estate assets used by Lan and her companies as collateral for loans, but the legal status of those assets is often unclear, as many are still seeking permits while some violated rules on public land or permits, according to the new information.

Some of the assets include valuable properties in high-end districts in Ho Chi Minh City but most are unfinished projects.

The Lan family estimated the assets at $30 billion, a family representative told Reuters this month, while the market appraisal firm Hoang Quan, hired by the central bank for an assessment, valued them around $12 billion, according to a November public document from the police, which detailed Lan’s alleged wrongdoing.

Some of Lan's Hong Kong business partners have expressed interest in the assets, Reuters reported earlier this month. They did not respond to requests for further comment about their interest in the assets after Lan’s trial verdict.

By David Lawder

WASHINGTON (Reuters) - The global economy is set for another year of slow but steady growth, the International Monetary Fund said on Tuesday, with U.S. strength pushing world output through headwinds from lingering high inflation, weak demand in China and Europe, and spillovers from two regional wars.

The IMF forecast global real GDP growth of 3.2% for 2024 and 2025 - the same rate as in 2023. The 2024 forecast was revised upward by 0.1 percentage point from the previous World Economic Outlook's estimate in January, largely due to a significant upward revision in the U.S. outlook.

"The global economy continues to display remarkable resilience with growth holding steady and inflation declining, but many challenges still lie ahead," Pierre-Olivier Gourinchas, the IMF's chief economist, told reporters.

A potential escalation of the Middle East conflict after Iran's rocket and drone attack on Israel could have a "strong effect" on limiting growth, he said, adding that it would raise oil prices and inflation, triggering tighter monetary policy from central banks.

The U.S. Treasury is preparing to hit Iran with new sanctions in coming days that could limit its ability to export oil, U.S. Treasury Secretary Janet Yellen said on Tuesday.

The report described an "adverse scenario" in which a Middle East escalation would lead to a 15% increase in oil prices and higher shipping costs would hike global inflation by about 0.7 percentage points.

The IMF forecast that global median headline inflation will fall to 2.8% by the end of 2024 from 4% last year, and to 2.4% in 2025.

U.S., EUROPE DIVERGE

The IMF revised its forecast for 2024 U.S. growth sharply upward to 2.7% from the 2.1% projected in January, on stronger-than-expected employment and consumer spending. It expects the delayed effect of tighter monetary and fiscal policy to slow U.S. growth to 1.9% in 2025, though that also was an upward revision from the 1.7% estimate in January.

European Central Bank President Christine Lagarde has cited the stark divergence between the U.S. and Europe, which is facing slower growth and faster-falling inflation.

The latest IMF forecasts bear this out, with a downward revision to the euro zone 2024 growth forecast to 0.8% from 0.9% in January, primarily due to weak consumer sentiment in Germany and France. Britain's 2024 growth forecast was revised down by 0.1 percentage point to 0.5% amid high interest rates and stubbornly high inflation.

CHINA PROPERTY WOES

The IMF left unchanged its forecast for China's 2024 growth to fall to 4.6% from 5.2% in 2023, with a further drop to 4.1% for 2025. But it warned that the lack of a comprehensive restructuring package for the country's troubled property sector could prolong a downturn in domestic demand and worsen China's outlook.

Such a situation could also intensify deflationary pressures, leading to a surge in cheap exports of manufactured goods that could stoke trade retaliation by other countries - a scenario that Yellen warned about during a trip to China earlier this month.

Gourinchas said, however, that China's stronger-than-expected first-quarter growth may prompt an upward revision to the outlook.

The IMF recommended that China accelerate the exit of non-viable developers and promote the completion of unfinished housing projects, while supporting vulnerable households to help restore consumer demand.

But the global lender noted bright spots in some big emerging market countries, raising its growth forecast for Brazil in 2024 by half a percentage point to 2.2% and increasing the forecast for India's growth by 0.3 percentage point to 6.8%.

It noted that Group of 20 large emerging market countries are playing a bigger role in the global trading system and have the capability to shoulder more of the growth burden going forward.

But the IMF said low-income developing countries continue to struggle with post-pandemic adjustments and greater levels of economic "scarring" than middle-income emerging markets. As a group, these low-income developing countries saw their 2024 growth forecast cut to 4.7% from an estimate of 4.9% in January.

RUSSIAN RESILIENCE

In one of the biggest surprises, Russia's 2024 growth forecast was increased to 3.2% from the 2.6% projected in January. The report said the increase partly reflected continued strong oil export revenues amid higher global oil prices despite a price-cap mechanism imposed by Western countries, as well as strong government spending and investment related to war production, along with higher consumer spending in a tight labor market. The IMF also upgraded Russia's 2025 growth forecast to 1.8% from 1.1% in January.

Ukraine's growth, which is highly dependent on economic aid from the West, is forecast to slow to 3.2% in 2024 and accelerate to 6.5% in 2025.

While initial price spikes for grains, oil and other commodities have faded since Russia's 2022 invasion of Ukraine, a widening of the conflict could cause them to intensify.

By Brigid Riley

TOKYO (Reuters) -The dollar rose to a five-month high against major peer currencies on Tuesday following hotter-than-expected U.S. retail sales figures, raising worries of an intervention from Tokyo as the yen languished at its lowest since 1990.

The Chinese yuan edged marginally lower even after GDP data for China's first quarter beat expectations in a boost for policymakers trying to shore up confidence in the face of a protracted property crisis.

Data on Monday showed U.S. retail sales rose 0.7% last month, compared with a 0.3% rise that economists polled by Reuters had forecast. Data for February was revised higher to show sales rebounding 0.9% for the largest gain in just over a year, much stronger than the previously reported 0.6%.

The latest data has raised more questions about when the Federal Reserve could begin cutting interest rates, following robust employment gains in March and a pick-up in consumer inflation.

Markets are now pricing in a 41% chance of the Fed cutting rates in July, compared with around 50% before the data, according to CME FedWatch tool. The likelihood of the first cut coming in September has bumped up to nearly 46%.

"I just see no chance of a July cut, assuming we’re all looking at the same data," said Matt Simpson, senior market analyst at City Index.

Underlining the market bets, the president of the San Francisco Federal Reserve Bank, Mary Daly, said late on Monday in the United States that there is "no urgency" to cut U.S. interest rates.

The U.S. dollar index touched 106.39 on Tuesday, the highest since Nov. 2.

In the face of dollar strength, the yen breached 154 per dollar to its weakest in 34 years.

That kept traders on high alert for yen-buying intervention from Japanese authorities. With hedge funds building up their largest bets against the currency in 17 years, a rebound in the yen could trigger a significant rally.

In Tokyo, Japanese Finance Minister Shunichi Suzuki said on Tuesday he was closely watching currency moves and will take a "thorough response as needed".

The yen last hovered around 154.26 per dollar, close to the new resistance level of 155.

Despite verbal warnings, "the test of 155 seems too tempting," and market forces are likely to drive the currency pair higher, said Simpson at City Index.

"How it reacts around that level should provide a good indication of whether (Japanese authorities) have thrown in the towel with intervention."

The onshore yuan fell to 7.2422 per dollar to its lowest since November, before picking up after official data showed China's economy grew in the first quarter by 5.3% from a year earlier, comfortably beating analysts' expectations.

But the country's retail sales missed expectations, a worrying sign for consumer confidence and a reflection of the economy's uneven recovery.

The yuan last stood at 7.2376 per dollar, with losses capped thanks to the upbeat gross domestic product (GDP) figures and state bank support.

The euro was at $1.060625, the weakest since Nov. 2, as it continued to slump after the European Central Bank last week left the door open to a rate cut in June.

The Australian dollar dropped to $0.64085, its lowest since Nov. 14, while the kiwi similarly slid to a five-month low of $0.58735.

Bitcoin fell roughly 1% to $62,550.00.

By Liangping Gao and Ryan Woo

BEIJING (Reuters) -The prices of new homes in China fell at their fastest pace in more than eight years in March hit by poor demand as debt troubles among property developers dragged on the outlook for an economy seeking to find a firmer footing.

March home prices dropped 2.2% from a year earlier, marking the biggest decline since August 2015, and worse than a 1.4% fall in February, according to Reuters calculations based on National Bureau of Statistics (NBS) data.

Prices fell 0.3% month-on-month, matching February's drop.

China's property sector, accounting for nearly a quarter of the economy, has been engulfed by a debt crisis since 2021 after a regulatory crackdown on high leverage among developers triggered a liquidity crunch, with a string of them reporting weaker financial results for 2023 last month.

Authorities have been ramping up measures to prop up the troubled sector, including relaxing home purchase curbs, supporting urban village renovation, and pushing banks to quicken new loan approvals to cash-strapped developers.

But analysts say many of these policies are piecemeal in nature or have only limited short-term impact, which in turn is keeping home buying sentiment in check and curbing a broader full-blown recovery.

Declines in home prices worsened year-on-year in tier-one, tier-two and tier-three cities.

Potential buyers have also been wary of purchasing new homes because of concerns about the ability of indebted developers to deliver projects on time.

주택이 제때 공급될 수 있도록 부동산 프로젝트까지 자금 지원을 확대해야 한다고 중국 경제 차르인 허 라이프펑(He Lifeng) 부총리가 지난 주말 말했다.

제때 주택을 인도하는 것은 기대를 안정시키는 데 도움이 될 것이라고 그는 중부 도시 정저우에서 시찰 투어에서 말했다.

By Ankur Banerjee

SINGAPORE (Reuters) - Asian stocks fell and the dollar climbed to more than five-month highs on Tuesday as stronger-than-expected U.S. retail sales for March further reinforced expectations that the Federal Reserve is unlikely to be in a rush to cut interest rates this year.

Rising geopolitical tensions kept risk sentiment in check, lifting prices of gold and oil, while investor focus in Asia turns to China with GDP data due at 0200 GMT.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.4% to nearly seven-week lows of 521.92, with Japan's Nikkei down 1.6%.

U.S. stocks closed sharply lower on Monday as a jump in Treasury yields weighed on sentiment amid concerns about rising tensions between Iran and Israel. [.N]

Israelis awaited word on how Prime Minister Benjamin Netanyahu would respond to Iran's first-ever direct attack on their country. Netanyahu on Monday summoned his war cabinet for the second time in less than 24 hours to weigh a response to Iran's weekend missile and drone attack, a government source said.

"The markets have come alive with the sound of derisking, deleveraging, hedging and broad managing of risk exposures," said Chris Weston, head of research at Pepperstone.

"There is certainly not much in the news flow to inspire risk-taking and there is a growing list of factors to refrain from buying and to manage exposures."

U.S. retail sales rose 0.7% last month, the Commerce Department's Census Bureau said on Monday, while economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, would rise 0.3%.

The stronger-than-expected data comes after a report last week underscored inflation remains stickier than markets had expected, leading to a drastic scaling back of rate cuts this year.

Traders now anticipate 45 basis points of cuts this year, down from more than 160 bps in expected easing at the start of the year. Markets are now pricing in September, instead of June, to be the starting point for rate cuts, according to CME FedWatch Tool.

The yield on 10-year Treasury notes was at 4.608% in Asian hours having surged to a five-month high of 4.663% on Monday. [US/]

The elevated yields boosted the dollar and kept the yen near 34-year lows it has been rooted at in the past few days. [FRX/]

The dollar index, which measures the U.S. currency versus six rivals, was up 0.028% at 106.23, having risen 0.189% overnight. The yen weakened to 154.39 leading to fresh worries over intervention and comments from officials.

Japanese Finance Minister Shunichi Suzuki said on Tuesday he was closely watching currency moves and will provide a "thorough response as needed" after the dollar surged to a fresh 34-year high.

Carol Kong, a currency strategist at Commonwealth Bank of Australia (OTC:CMWAY), said elevated oil prices and expectations of higher for longer U.S. interest rates are underpinning dollar/yen.

"The dollar/yen remains at risk of pulling back sharply should the Ministry of Finance decide to step into the FX markets and buy JPY. The weaker the JPY stays, the higher the risk that the Bank of Japan will deliver an earlier rate hike in our view."

All eyes during Asian trading hours will be on China GDP along with industrial activity, fixed asset investment, retail sales and property market data.

"The property market has yet to confirm a bottom, and markets will watch the price data closely for any signs of stabilisation; a bottoming out of housing prices would be a positive sign of sentiment recovery," ING economists said.

In commodities, U.S. crude rose 0.63% to $85.95 per barrel and Brent was at $90.63, up 0.59% on the day on rising tensions in the Middle East. [O/R]

Spot gold added 0.1% to $2,385.88 an ounce. [GOL/]