By Tom Westbrook

SINGAPORE (Reuters) -The dollar climbed on Wednesday in the wake of more strong U.S. economic data, nudging the Japanese yen to a 34-year low and into the zone that drew official market intervention in 2022.

The yen traded at 151.97 per dollar in the Asia session, down about 0.2% and weaker than 151.94 where Japanese authorities stepped in during October 2022 to buy the currency and its weakest level since the middle of 1990.

For the quarter ending later this week the yen is the worst-performing major, down more than 7% on the dollar even after Japan's exit last week from negative interest rates.

Officials have been making near daily warnings against speculative moves and markets are jittery about a test of 152 per dollar as Finance Minister Shunichi Suzuki said Japan won't rule out any steps if it thinks the yen is falling too fast.

"The market is very sensitive to the 152 area," said National Australia Bank (OTC:NABZY) strategist Rodrigo Catril.

"If we were to break that level then recent history would suggest that intervention would be much more likely."

BOJ policymaker Naoki Tamura said on Wednesday the central bank must proceed slowly but steadily toward normalising its policies - seemingly giving the yen a little push weaker.

The move set the dollar higher more broadly, with the Chinese yuan and New Zealand dollar sold very close to four-month lows.

The yuan weakened to 7.2285 per dollar despite a strong fix of its trading band by the central bank. The New Zealand dollar fell 0.2% to $0.5988. New Zealand's Treasury revised its economic growth forecasts lower on Tuesday.

Australian data published in the morning showed inflation holding at a two-year low of 3.4% in February, reinforcing market wagers that the next move in interest rates would be down. The Aussie slipped 0.3% to $0.6515.

It is down 4.4% for the quarter. Other moves in Asia were kept in check as markets wait for Friday's release of U.S. core inflation data.

Overnight data showed a bigger-than-expected jump in U.S. durable goods orders in February. While that only partly made up for a large drop in January and came with sub-par consumer confidence data, it pushed the dollar up a little bit.

The euro, at $1.0825 is more or less in the middle of a range it has kept for a year and is down 1.9% for a quarter where expectations for U.S. rate cuts have been scaled back.

The Swiss franc, still reeling from a surprise rate cut in Switzerland last week, fell about 0.5% on the dollar to a four-month low of 0.9042 overnight.

It is down about 7% for the first quarter of the year. The U.S. dollar index is up 3% for the quarter to 104.4.

Sterling was steady at $1.2621 and was broadly steady for the quarter, too, down just 0.8%.

On Tuesday Bank of England policymaker Catherine Mann said she changed her mind to vote for a rate hold last week, instead of a hike, due to consumers turning more stingy. But she still believes financial markets have too many cuts priced in.

BEIJING (Reuters) -China's industrial firms posted higher profits in the opening months of the year, official data showed on Wednesday, suggesting an economic recovery was gaining momentum despite persistent sluggishness in the property sector.

Profits at China's industrial firms jumped 10.2% in the first two months from the same period last year, following a 2.3% profit decline for the whole of 2023, National Bureau of Statistics (NBS) data showed.

A slew of upbeat economic indicators in January-February was tempered by the persistent fragility in the property market, pointing to a divergence in the post-pandemic economic recovery.

Earlier in March, Chinese electric vehicle battery giant CATL posted its first drop in quarterly earnings since the second quarter of 2022, amid intensified competition and slowing demand in the world's largest auto market.

In the face of lingering economic weakness, a deputy central bank chief last week assured markets of policy options at its disposal, including cuts in banks' reserve requirement ratios (RRR). The central bank announced the biggest RRR reduction in two years in January.

State-owned firms recorded a 0.5% rise in earnings in January-February, foreign firms saw a 31.2% gain while private-sector companies booked a 12.7% increase, the data showed.

The statistics bureau publishes combined data for the first two months to sort out distortions due to the varied timing of the Lunar New Year.

Industrial profit numbers cover firms with annual revenues of at least 20 million yuan ($2.78 million) from their main operations.

($1 = 7.1986 yuan)

(Reuters) - S&P Global downgraded its outlooks on five regional U.S. banks to "negative" from "stable" due to their commercial real estate (CRE) exposures, the ratings agency said on Tuesday.

It downgraded First Commonwealth (NYSE:FCF) Financial, M&T Bank (NYSE:MTB), Synovus (NYSE:SNV) Financial, Trustmark (NASDAQ:TRMK) and Valley National Bancorp (NASDAQ:VLY).

"The negative outlook revisions reflect the possibility that stress in CRE markets may hurt the asset quality and performance of the five banks, which have some of the highest exposures to CRE loans among banks we rate," S&P said.

The most recent downgrades bring the total negative outlooks on nine U.S. banks, or 18% of those that S&P rates, it said, adding most of those "relate, at least in part to sizable CRE exposures".

CRE exposures of regional banks were heavily scrutinized this year since New York Community Bancorp (NYSE:NYCB) flagged a surprise loss and slashed its dividend citing loan loss provisions on CRE loans, which triggered a sell-off in U.S. regional banking shares.

Investors and analysts alike have been worried that higher borrowing costs and low occupancy rates for office spaces could exacerbate the stress on lenders exposed to potential defaults by borrowers in the CRE sector.

However, S&P said it maintained a 'stable' outlook on F.N.B Corp, "since we see a somewhat lower probability of material deterioration in its asset quality and performance".

SEOUL (Reuters) - South Korean consumer spending will benefit from interest rate cuts when the central bank makes them, a member of its board said on Tuesday, adding that domestic demand has become more sensitive to interest rates than before.

Consumer sentiment dropped sharply in March on growing worries about higher produce prices, a survey by the Bank of Korea (BOK) showed on Tuesday, as inflation emerges as a major issue ahead of next month's elections.

"There will be positive effects from normalising interest rates after inflation is stabilised, as it will ease the burden of debt repayment," the official, Suh Young-kyung, told media prior to her last policy meeting in April.

Suh, however, declined to answer a question on the timing of cuts in interest rates.

"There are also worries about upward pressures on household loans and house prices, which may not seem that huge, but certainly remain."

Suh, whose four-year term ends a week after the April 12 meeting, said domestic spending was recovering slower than expected as it had become more sensitive to interest rates, which have stayed high over a prolonged period.

The monetary policy board will decide on interest rates after taking careful consideration of both sides, Suh said, citing inflation, domestic demand, household debt and house prices as key factors.

At their last meeting in February, most BOK board members said it was too early for a pivot in monetary policy, seeking to cool investors' aggressive rate cut expectations after keeping interest rates at a 15-year high.

HONG KONG (Reuters) - Hong Kong private home prices fell for the tenth month in a row to the lowest since September 2016 in February, and they are expected to remain suppressed even after the government recently removed the decade-long curbs for the property market.

Home prices in one of the world's most expensive property markets dropped 1.7% in February from the previous month, official data showed on Tuesday, following a revised 1.2% fall in January.

In late February, Hong Kong removed all additional stamp duties for foreign and second home buyers, as well as on those selling flats within two years of buying them, in a bid to boost the city's depressed real estate market and the property market immediately celebrated with a jump in transactions.

Mainland Chinese are also snapping up homes in Hong Kong, accounting for up to a third of new property sales, property developers and agents said, after a pandemic-induced lull spanning more than three years.

For primary sales of luxury residential properties worth more than HK$30 million ($3.84 million), the percentage was even higher, accounting for around 70%, JLL said on Monday, rebounding from less than 50% before the curbs removal. The realtor expected mainland Chinese buyers to remain active.

Housing prices have plunged more than 20% from their 2021 peak due to higher mortgage rates, an outflow of talent and a weak market outlook.

Even though sales have risen, analysts expect prices to remain suppressed as developers offer discounts to clear inventory. S&P Global Ratings estimated transaction volumes this year will recover only moderately from 2023, as interest rates remain high.

($1 = 7.8220 Hong Kong dollars)

By Tom Westbrook

SINGAPORE (Reuters) - Asian equities climbed on Tuesday but could not break this month's highs as mixed messages from U.S. Federal Reserve policymakers left doubts hanging over the timing of interest rate cuts.

The risk of Japan intervening to prevent further falls in the yen put a little pressure on the dollar, however it rose against the yuan on speculation that China may tolerate a weaker currency.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6%, with gains for South Korean chipmakers SK Hynix and Samsung Electronics (KS:005930) leading the Kospi up 1.2%. (KS)

Japan's rocketing Nikkei was steady, as was the yen at 151.31 per dollar.

Overnight, Chicago Fed President Austan Goolsbee said he had pencilled in three rate cuts this year, while Fed Governor Lisa Cook urged caution and Atlanta Fed President Raphael Bostic re-iterated Friday remarks trimming his expectations to one cut.

The diversity of views throws a few wildcards into the policy outlook while markets wait on the next U.S. inflation indicators due when many markets will be closed for Good Friday.

"Comments by FOMC participants suggest to us that four voters – Bostic, Bowman, Mester, and Barkin –  see zero, one or two cuts this year," said Standard Chartered (OTC:SCBFF) strategist Steve Englander.

"We still think (chairman Jerome) Powell has eight votes for easing, but he probably does not want an 8-4 vote on the first cut of the cycle. Rather, he may hope that good inflation outcomes will allow him to swing a couple of votes into the cutting camp in the coming months."

Interest rate futures price about three Fed rate cuts this year and about a three-in-four chance of the first cut in June.

U.S. two-year yields, which track short-term interest rate expectations, rose in New York trade overnight then fell 4.5 basis points in the Asia morning to 4.58%. [US/]

S&P 500 futures rose 0.1% and the cash index closed 0.3% lower overnight.

In foreign exchange, Monday's rhetoric from Japan's top currency diplomat, Masato Kanda, kept the yen steady as traders weigh the risk of Japan buying heavily. Kanda said the yen's recent slide was "strange" and "speculative".

The Bank of Japan (BOJ) lifted interest rates last week but the yen has fallen near to three-decade lows on the dollar.

"Much like in 2016, when the BOJ cut rates to negative and (dollar/yen) went down, this month's BOJ decision to exit negative rates is a nothingburger and a red herring for (dollar/yen)," said Spectra Markets President Brent Donnelly.

"The pair continues to follow some combination of U.S. yields and Nikkei, with yields the primary driver."

China's yuan opened steady after a stronger-than-expected fixing of its trading band, but selling pressure soon drove it to the weak side of its 200-day moving average at 7.2165 per dollar.

Markets were unsettled by a sharp drop in the yuan on Friday, after months of tight trading, and some speculate China is loosening its grip on the currency to allow it to fall.

"Whether this reflects a shift in FX policy remains to be seen but accommodative monetary conditions are necessary in the face of growth headwinds," said BofA Securities' strategist Adarsh Sinha.

"If (yuan) depreciation sustains and coincides with a weaker credit impulse, Asia FX is vulnerable."

Later on Tuesday, the Reserve Bank of New Zealand's chief economist is due to speak and U.S. manufacturing, services and consumer confidence figures are due. U.S. core PCE data is due on Friday.

Gold and oil prices were broadly steady in commodities trade, with spot gold at $2,169 an ounce and Brent crude futures up 24 cents a barrel to $86.99. [GOL/][O/R]

Bitcoin hovered just above $70,000 after rising sharply on Monday.

By Tetsushi Kajimoto

TOKYO (Reuters) -Japanese Finance Minister Shunichi Suzuki said on Tuesday that he would not rule out any measures to rein in weakness in the yen, echoing a warning from the nation's top currency diplomat the previous day.

Suzuki said a weak yen has both positive and negative effects on the economy but excessive volatility raises uncertainty for business operations. This in turn could hurt the economy, the minister said, reinforcing Tokyo's focus on the velocity of market moves, rather than on specific currency levels.

"Rapid currency moves are undesirable," Suzuki told reporters after a cabinet meeting. "It is important for currencies to move stably, reflecting economic fundamentals."

Early on Tuesday, the dollar was off slightly against the yen, fetching 151.26 and facing great resistance near the 152 level due to the threat of intervention from Japanese authorities. The greenback is up about 7% on the yen since the start of the year.

Suzuki declined to comment on the possibility of Tokyo intervening to stem the yen weakness, but suggested the speed of the currency's fluctuations will be a factor in any decision to enter the market.

"If I answer the question about currency intervention, it could have unintended effects on the market," Suzuki said, adding "if there's excessive moves, we will respond appropriately without ruling out any measures."

Japan last intervened in the currency market in September and October 2022 to stem the yen's declines, initially when the dollar hit around 145 to the yen, and later in October when the U.S. currency surged to a 32-year high near 152 levels.

By Lucia Mutikani

WASHINGTON (Reuters) -Sales of new U.S. single-family homes unexpectedly fell in February after mortgage rates increased during the month, but the underlying trend remained strong amid a chronic shortage of previously owned houses on the market.

The report from the Commerce Department on Monday also showed the median new house price last month was the lowest in more than 2-1/2 years, while supply was the highest since November 2022. Builders are ramping up construction, while offering price cuts and other incentives as well as reducing floor size to make housing more affordable.

"Housing activity is stabilizing as homebuilders appear to be building cheaper, and therefore, likely smaller homes," said Conrad DeQuadros, senior economic advisor at Brean Capital. "Sales have been relatively stable at December's level over the last two months and prices have been falling at mid-single-digit rates on a year-over-year basis."

New home sales slipped 0.3% to a seasonally adjusted annual rate of 662,000 units last month, the Commerce Department's Census Bureau said. The sales pace for January was revised up to 664,000 units from the previously reported 661,000 units.

Economists polled by Reuters had forecast new home sales, which account for 13.1% of U.S. home sales, would rise to a rate of 675,000 units. New home sales are counted at the signing of a contract, making them a leading indicator of the housing market. They, however, can be volatile on a month-to-month basis. Sales advanced 5.9% on a year-on-year basis in February.

The new homes market has defied 525 basis points worth of interest rate hikes from the Federal Reserve since March 2022, bolstered by a dearth of previously owned houses for sale.

The overall housing market has likely turned the corner, with home resales surging to a one-year high in February. Nonetheless, supply remains inadequate, keeping house prices elevated and homeownership out of the reach of many.

The average rate on the popular 30-year fixed-rate mortgage jumped to 6.94% in late February, before retreating to just below 7.0% by mid-March, according to data from mortgage finance agency Freddie Mac. The U.S. central bank is expected to start cutting rates sometime this year.

Stocks on Wall Street were trading lower. The dollar rose against a basket of currencies. U.S. Treasury prices fell.

UPBEAT OUTLOOK

Last month, new home sales plunged 31.5% in the Northeast and declined 2.4% in the Midwest. Sales in the densely populated South increased 3.7% and climbed 2.3% in the West.

"It's worth noting that mortgage rates rose from 6.8% to 7.0% in the same month, which probably put some buyers off entering the market," said Thomas Ryan, property economist at Capital Economics. "We're sticking with our upbeat forecast for new home sales over the next few years."

A survey from the National Association of Home Builders last week showed a measure of sales over the next six months rising to a nine-month high in March. A gauge of prospective buyers was the highest since last August.

The median new house price in February was $400,500, the lowest since June 2021 and a 7.6% drop from a year ago.

Economists welcomed the decline in the median new house price, which they said bode well for both affordability and inflation. Housing, through higher rents, has accounted for much of the increase in inflation.

Overall house prices, however, continue to rise because of the supply squeeze in the home resales market.

Most of the new homes sold last month were in the $300,000-$399,000 price range. The government reported last week that housing completions hit their highest level in 17 years in February. More new home supply is in the pipeline, which could further dampen house price inflation.

There were 463,000 new homes on the market at the end of February, the most since November 2022. That was up from 457,000 units in January. At February's sales pace it would take 8.4 months to clear the supply of houses on the market, up from 8.3 months in January.

Houses under construction accounted for 58.7% of inventory. Homes yet to be built made 22.9% of supply, while completed houses accounted for 18.4%.

"Rate incentives from builders are still able to ease the financial burden for buyers and have made new homes more appealing, but it's unknown for how long builders can continue to offer such incentives," said Daniel Vielhaber, an economist at Nationwide.

SYDNEY (Reuters) - Australia's government will support a minimum wage increase in line with inflation this year as low-income families continue to grapple with costs of living, although the rise would be smaller as inflation eased.

In a submission to the Fair Work Commission's 2023-24 Annual Wage Review to be unveiled on Thursday, the Labor government will recommend the increase to ensure "the real wages of the low-paid workers do not go backwards", a position the government has held in the last two years.

"Certainly the expectation is that the minimum wage will be lifted. What we're trying to ensure is that people on the lowest pay in our economy and in our country don't go backwards," Treasurer Jim Chalmers said in an TV interview on Monday.

"This is all about ensuring that people can earn more... And that's because we recognise that these cost-of-living pressures do fall disproportionately on the lowest paid in our workplaces."

Last July, the FWC hiked the minimum wage by 5.75% as costs of living surged, a decision some had feared would further stoke inflation. However, there has been no sign of a damaging wage-price spiral and inflation has slowed to two-year lows of 3.4% from a peak of 8.4%.

The Reserve Bank of Australia sees inflation edging down to 3.3% by June 2024.

The Labor government has also pledged more costs of living relief in the upcoming budget in May. It will deliver tax cuts for every taxpayer from July this year.

SINGAPORE (Reuters) -Singapore's February core inflation accelerated to its fastest pace in seven months, official data showed on Monday, as seasonal effects from the Lunar New Year drove services and food prices higher.

The core inflation rate, which excludes private road transport and accommodation costs, came in 3.6% in February from a year earlier, faster than the 3.4% forecast by a Reuters poll of economists and the 3.1% seen in January.

The February figure was the highest since the 3.8% in July 2023 according to LSEG data.

Headline consumer prices in February were up 3.4% from the same month last year, stronger than the 3.3% forecast in the poll and the 2.9% rise in January.

"This was driven by higher services and food inflation, partly reflecting seasonal effects associated with the Chinese New Year," the Trade Ministry and Monetary Authority of Singapore (MAS) said in a statement on Monday.

Core inflation is expected to resume a gradual moderating trend over the rest of the year, it said, as import cost pressures continue to decline and tightness in the domestic labour market eases.

They projected both headline and core inflation to average 2.5% to 3.5% for 2024, unchanged from previous official forecast.

"Going forward, we expect inflation to remain elevated in March before easing to 2% by the end of the year," Goldman strategists Rina Jio and Jonathan Sequeira wrote in a research note on Monday.

"We continue to expect the MAS to keep its monetary policy parameters unchanged this year," they added.

While inflation has slowed from its peak of 5.5% in January last year, it remains sticky amid slowing economic growth and an increase in goods and service tax by one-percentage point this year.

The economy expanded 1.1% last year, moderating from the 3.8% in 2022.

Singapore expects higher economic growth at 1% to 3% this year but warned of a mixed economic outlook due to geopolitical risks. MAS in January left monetary policy settings unchanged in its first review of 2024.

MAS, which uses exchange rate as its primary tool, has increased the frequency of its reviews from twice a year to quarterly starting this year. It is due to revisit monetary settings in April.

"The gradually strengthening S$ trade-weighted exchange rate should also continue to temper Singapore's imported inflation in the quarters ahead," MAS and the Trade Ministry said.