By Anant Chandak

BENGALURU (Reuters) - Growth in India's services activity growth slowed to a five-month low in May as robust domestic demand weakened, according to a survey, which also showed exports growing at a record pace and job creation rising to a 21-month high.

The final HSBC India Services purchasing managers' index, compiled by S&P Global, fell to 60.2 last month from April's 60.8, confounding a preliminary reading for a rise to 61.4.

However, it remained above the 50 mark separating growth from contraction for the 34th straight month.

"India's service activity rose at a slightly softer pace in May, with domestic new orders easing slightly, but remaining robust, implying strong demand conditions and successful advertising," noted Maitreyi Das, global economist at HSBC.

Even though the new business sub-index - a key gauge for demand - remained robust in May, it grew at the slowest pace this year due to fierce competition and heat waves across the country hampering livelihood.

However, exports expanded at the steepest pace since the inclusion of the sub-index in the monthly survey nearly a decade ago.

With signs of recovery in China and economic activity remaining resilient in the U.S., the recent pick up in global demand could continue.

Strong sales led the business outlook for the coming 12 months to climb to an eight-month high, encouraging services firms to add jobs at the fastest pace since August 2022.

But price pressures intensified last month from April with input prices outpacing its long-run average and prices charged also quickening slightly.

"Cost pressures ticked up in May led by higher raw material and labour costs. Firms were only able to transfer a part of the price rise to customers," added Das.

That could trigger a resurge in inflation, which has largely eased this year, raising chances the Reserve Bank of India would keep interest rates on hold for a longer period and likely cut in October-December quarter compared with July-September expected earlier.

As business activity in both manufacturing and services eased slightly in May, it meant the overall HSBC India composite PMI output index fell to a five-month low of 60.5 last month from April's 61.5 and below a flash estimate of 61.7.

Sustained growth in both services and factory activity would be key focus areas for the new government elected on June 4 to ensure India continues to hold on to its title as the fastest-growing major economy in the years ahead.

India grew at a better-than-expected pace of 7.8% last quarter.

By Neil Jerome Morales and Mikhail Flores

MANILA (Reuters) -Philippine annual inflation quickened for a fourth straight month in May due largely to the faster pace of increases in housing, utility and transport costs, the statistics agency said on Wednesday.

The consumer price index rose 3.9% in May from 3.8% the previous month, marking the fastest rise since November 2023, bringing the five-month average inflation to 3.5%, well inside the central bank's 2.0%-4.0% target for the year.

Economists in a Reuters poll had forecast annual inflation at 4.0%.

The Bangko Sentral ng Pilipinas (BSP) said last month's data was consistent with its expectations that inflation could accelerate over the near term due to the impact of adverse weather conditions on farm output.

Core inflation, which strips out volatile food and energy prices, eased to 3.1% in May from 3.2% the prior month.

BSP Governor Eli Remolona reiterated on Tuesday the benchmark policy rate, currently at a 17-year high of 6.50%, could be cut before the U.S. Federal Reserve starts it easing cycle.

But Ruben Carlo Asuncion, chief economist at Manila-based Union Bank, believed the BSP would still prefer to wait for the Fed to move before it does to prevent the peso, down more than 5% against the dollar so far this year, from weakening too much.

"They may have to prioritize interest rate differentials over the speed of cuts," Asuncion said in a phone message.

The Philippine central bank, which kept its benchmark rate steady at its last five meetings, has said it was looking to cut rates by 25 basis points as early as August and by another 25 basis points in the fourth quarter.

Its next meeting is on June 27.

By Vivek Mishra and Vuyani Ndaba

BENGALURU/JOHANNESBURG (Reuters) - REUTERS POLL-NO REBOUND SEEN FOR EMERGING MARKETS CURRENCIES AS INVESTORS PONDER ELECTIONS, SCOPE FOR US EASING

REUTERS POLL-EMERGING MARKETS CURRENCIES FORECAST TO EITHER WEAKEN OR CLING TO RANGES IN 3 TO 6 MONTHS

Emerging market currencies will struggle to rebound this year, pressured by a U.S. Federal Reserve that is in no rush to cut interest rates and some pivotal national election results, according to a Reuters poll of currency analysts.

Limited by a strong dollar this year, nearly all emerging markets currencies were forecast to weaken, or at best trade in a range in the next three to six months, according to the May 31 - June 4 survey of over 50 foreign exchange strategists.

Emerging markets assets have gained slightly after weak U.S. data suggested the Fed might start cutting interest rates as soon as September, which could ease the pressure from the dollar. This global theme remains pivotal to emerging markets amid a host of key elections.

U.S. policymakers, however, remain tight-lipped about the exact timing of policy easing and a bull run for emerging markets currencies it might trigger is not on the horizon.

"Most EM currencies have stabilized in the past month, but we think many will remain under pressure until U.S. yields drop," said Ruben Gargallo Abargues, assistant economist at Capital Economics.

"We continue to think the dollar will be on the front foot for some months until inflationary pressures ease and the Fed pivots towards rate cuts."

Recent days brought elections in India, South Africa, and Mexico and emerging markets are expected to stay volatile in the near-term as investors parse out what these results mean for future economic reforms.

The Indian rupee, Korean won and the South African rand are seen trading in a tight range in the next three to six months, while the Russian rouble and Turkey's lira were forecast to soften over 5%.

Mexico witnessed Claudia Sheinbaum's historic ascent as the nation's first female president, while South Africa's African National Congress suffered its toughest electoral setback in 30 years.

The Mexican peso closed on Tuesday at its weakest to the dollar since November after the country's ruling party looked poised for a super-majority in Congress that markets fear might bring constitutional change and diminish checks and balances.

Barclays analyst Erick Martinez, however, expected the impact to be short-lived.

"Ultimately, the dust will settle, markets will crunch numbers and determine what's feasible and what's not, and would go back to trading global factors especially given the strong links between the Mexican and U.S. economy," he said in a note.

In South Africa, investors wait to find out which from the wide array of parties - from Marxists to proponents of free markets - the ANC may pick as potential coalition partners.

For other stories from the June Reuters foreign exchange poll click here

By Howard Schneider

WASHINGTON (Reuters) - The U.S. job market in April cleared a key hurdle in its slow return from the COVID-19 pandemic when a wonky economic chart known as the "Beveridge Curve" finished its own journey from where it had shifted during the health crisis back to where it was in 2018 to 2019.

The Beveridge Curve plots the relationship between job openings and the unemployment rate, and data released on Tuesday further validates an idea floated by Federal Reserve Governor Christopher Waller in mid-2022 that, counter to the idea that inflation could only fall with a large rise in the unemployment rate, the pandemic's elevated level of job openings pointed to an alternate path.

A drop in job openings could create the economic "slack" needed for inflation to fall without much change in actual joblessness - returning the Beveridge Curve to where it was.

As of April, that appears to be what has happened.

The story isn't completely written: Inflation, which was running at 2.7% in April based on the Fed's preferred measure, is not back to the U.S. central bank's 2% target, and recent progress has been sluggish.

But measures of what's happening in the labor market are looking increasingly like they did before the pandemic.

NOT A MARQUEE CONCEPT

The Beveridge Curve is not one of the marquee economic concepts beyond the community of labor experts, but it has had a moment during the pandemic, with a large shift at the start of the health crisis and now a round trip back. Still unresolved is whether further progress on inflation - the so-called "last mile" - will require a move along the normal part of the curve, with further declines in job openings associated with rising unemployment.

JOB OPENINGS TO UNEMPLOYED

As the economy reopened from the pandemic, firms scrambled to meet a wave of demand. Job openings spiked. The ongoing health crisis, however, put a damper on the willingness to work, crimping labor supply.

By the spring of 2022 the Bureau of Labor Statistics estimated there were more than two open jobs for each unemployed person. The number before the pandemic never went much beyond 1.24.

In April it had returned to 1.24, a steady realignment between the demand for workers and those available to fill jobs.

QUITS RATE

From "ghosted" employers to a wave of retirements, the pandemic was a moment of peak leverage for people who wanted to negotiate new terms, a new job or better pay, or simply not show up. The quits rate told the tale, with nearly 3% of the workforce leaving jobs every month from mid-2021 to mid-2022 - a historic reshuffling of the labor market.

Much to the relief of human resource officers as well as Fed policymakers, it has been at 2.2% for six straight months, below where it was before the pandemic.

UNEMPLOYMENT RATE

An unemployment rate of around 4% is what the U.S. can support without rising inflation, according to Fed economic projections. But in mid-2018 the jobless rate dipped below that level and, as the spike in unemployment caused by the pandemic receded, resumed the same trend in early 2022. Whether that represents a "new" normal of high comparative demand for labor remains to be seen; job markets may just be functioning better through, for example, technology that improves matching and allows for faster hiring.

Regardless, it's another way today's job market looks like it did before the coronavirus outbreak.

MONTHLY PAYROLL GROWTH

The release on Friday of the U.S. government's monthly jobs report will provide the latest look at a key aspect of labor normalization when employment and job growth data for May are released.

Even if the U.S. population is growing slowly, it is still growing, so more jobs are needed each month to keep pace. Exactly how many more is a matter of debate. There are estimates of fewer than 100,000, though lately a jump in immigration has led to speculation that the number could be double that figure.

The job growth seen during the post-pandemic reopening of the economy, however, is widely considered unsustainable. It has been slowing, with a pace gradually coming into line with the average of 183,000 per month seen in the decade before the health crisis.

(Reuters) - Myanmar's junta is cracking down on gold and foreign exchange traders and agents selling foreign real estate, with 35 arrests announced in the last two days as part of efforts to stabilise its rapidly depreciating currency.

State media said these include five people charged with illegally selling condominium units in Thailand and 14 people arrested for allegedly destabilising the foreign currency exchange rate.

The kyat currency hit a record low last week, plummeting to around 4,500 per dollar on the black market, according to five foreign exchange traders.

Black market rates for the kyat have for years been significantly higher than the reference rate of Myanmar's central bank, currently set at 2,100 kyat per dollar.

"The government is working towards the stability of the country and the rule of law," the Global New Light of Myanmar newspaper said on Tuesday, carrying photographs of over a dozen suspects.

"Security organisations have taken action against business people engaged in speculation to hinder the country's economic development," it said.

Another 21 people have been arrested for allegedly destabilising gold prices, the newspaper reported on Monday.

The impoverished Southeast Asian country of about 55 million people has been in political and economic turmoil since a 2021 coup when the military ousted an elected civilian government after a decade of tentative democracy and economic reform. 

Myanmar's economy, already fragile after decades of military rule and the pandemic, has wilted since the coup, with foreign investment drying up, exacerbated by western sanctions.

Poverty rates have almost doubled from 24.8 percent in 2017 to 49.7 percent in 2023, according to the United Nations Development Programme.

The shadow National Unity Government (NUG), comprising former lawmakers and other junta opponents, said the military government has printed large volumes of currency since taking power and ramped up military spending, exacerbating the country's economic problems.

A junta spokesman did not respond to a call from Reuters seeking comment.

"We understand that they are continuing to print kyat," NUG finance minister Tin Tun Naing said at an online press conference on Monday.

(Reuters) - The U.S. consumer financial watchdog agency on Monday announced the creation of a public database to identify nonbank financial companies caught violating consumer laws, saying it would help catch and deter corporate repeat offenders.

New regulations require debt collectors, mortgage and payday lenders, credit reporting companies and other nonbank financial services companies, many of which are not otherwise registered or licensed, to inform the Consumer Financial Protection Bureau (CFPB) of actions taken against them at the federal, state and local level, the agency said.

"Too many American families and businesses have been harmed by repeat offenders in a rinse repeat cycle of illegal activity where bad actors see fines and penalties as just the cost of doing business," CFPB Director Rohit Chopra told reporters.

"The registry is going to help the CFPB and other law enforcement agencies monitor and track repeat offenders in order to better hold them accountable if they break the law."

CFPB officials say the new registry, first proposed in late 2022, continues an agency push to fight corporate recidivism following the creation that year of a Repeat Offender Unit within its supervision program.

The database will be partly available to the public online and should also be used by state attorneys general and other regulators as well as investors and creditors performing due diligence, according to the agency statement.

Agency officials said on Monday that they modified their original proposal in light of some industry feedback. For example, companies that already have enforcement actions recorded in a nationwide licensing system for nonbank mortgage lenders will be able to use a simplified filing process.

However, trade organizations also objected to provisions that appear to remain in the new regulation, including a requirement for senior executives to attest in writing that a given company is in compliance with existing court orders and enforcement actions.

The Electronic Transactions Association, members of which include Amazon.com (NASDAQ:AMZN), Apple (NASDAQ:AAPL) and JPMorgan Chase (NYSE:JPM), last year urged the CFPB to allow appeals and de-listing, but bureau officials said on Monday they had not instituted such procedures.

The first corporate registrations are expected in January of 2025.

By Hyonhee Shin

SEOUL (Reuters) -South Korean President Yoon Suk Yeol said on Tuesday the country will step up cooperation with African nations to secure a stable supply of critical minerals and speed up negotiations to promote economic partnerships and trade.

Hosting a first-ever summit with the leaders of 48 African countries, Yoon said South Korea will increase development aid for Africa to $10 billion over the next six years as it looks to tap the continent's rich mineral resources and potential as a vast export market.

"We will seek sustainable ways to work together on issues directly related to future growth, such as stable supplies of key minerals and digital transformation," Yoon said in his opening remarks.

He also pledged to offer $14 billion in export financing to promote trade and investment for South Korean companies in African countries.

South Korea is one of the world's largest energy buyers and is home to leading semiconductor producers. It is also home to the world's fifth-largest automaker Hyundai Motor (OTC:HYMTF) Group, which is making a push for electrification.

Partnering with Africa, which has 30% of the world's reserves of critical minerals including chrome, cobalt and manganese is crucial, Yoon's office has said.

At least 30 heads of state are attending the summit, with delegations from 48 countries participating. Yoon and the chair of the African Union, Mauritania President Mohamed Ould Ghazouani, are due to issue a joint statement, Yoon's office said.

Yoon proposed "shared growth" as a pillar of cooperation with the continent and stressed the need to establish a framework to promote trade and exchange, vowing to speed up talks for economic partnership agreements and trade and investment promotion frameworks.

By reaching out with offers to help with industrial infrastructure and digital transformation, South Korea is trying to tap into a vast and fast-growing market that is home to 1.4 billion people, the majority of whom are 25 or younger.

Park Jong-dae, a former South Korean ambassador to South Africa and Uganda, argued Western and Chinese models of development had failed African nations, and South Korea offered a valuable alternative path.

"The essence of Korean model of development cooperation is human development, and about management, rather than about provision of assistance per se," he said.

"Korea has the experience and knowhow of development ... while many African countries have immense possibilities for development based on yet to be explored, untapped resources and endowment, and dynamic young population," he said.

On Wednesday, South Korean business leaders will host a business summit focused on investment, industrial development and food security.

Yoon will continue separate meetings with visiting leaders.

By Kevin Buckland

TOKYO (Reuters) - The dollar languished at its lowest since April against the euro and sterling on Tuesday as signs of a softening U.S. economy boosted the case for earlier Federal Reserve interest rate cuts.

The U.S. currency wallowed near a two-week trough to the yen after data showed a second straight month of slowdown in manufacturing activity and an unexpected decline in construction spending.

Following the data, fed funds futures increased the chances of a rate cut in September to around 59.1%, according to LSEG's rate probability app.

That compares with odds of around 55% on Friday, when data showed a stabilisation in consumer price pressures, helping knock the dollar to its first monthly loss of the year in May. Wagers were slightly below 50% earlier last week.

A key test comes in the form of monthly U.S. payroll figures on Friday.

"The persistent high-interest-rate policy of the Federal Reserve is under scrutiny as it continues to weigh on the U.S. economy," James Kniveton, senior corporate FX dealer at Convera, wrote in a client note. "Analysts are closely monitoring the upcoming job data for indications of economic strain."

Currently, a first quarter-point rate increase is fully priced by the Fed's November meeting, with a total of 41 basis points of tightening seen by year-end.

November "is poised to be a tumultuous period for the U.S. dollar due to the confluence of a potentially decisive Federal Reserve meeting and the U.S. elections," Kniveton said.

The Fed's next policy meeting concludes on June 12, when consumer price data is also due. Traders and analysts don't see any risk of a policy change at that gathering, but officials will update their economic and interest-rate projections.

The dollar index, which measures the currency against the euro, sterling, yen and three other major peers, eased 0.05% to 103.99, its lowest level since April 9.

The euro added 0.11% to $1.09155, a level last seen on March 21.

The European Central Bank has telegraphed that policy makers will cut rates at their meeting on Thursday, but a pick-up in inflation in data last week may give officials pause when considering when next to ease.

Sterling rose 0.05% to $1.2814, its strongest since March 14.

However, the dollar added 0.14% to 156.255 yen, clawing its way back from the overnight low of 155.95, its first time below 156 since May 21.

The Bank of England and Bank of Japan also hold potentially pivotal policy meetings later this month.

Elsewhere, the New Zealand dollar rose to $0.6194 for the first time since March 8. The Aussie traded flat at $0.66895, holding close to the two-week high of $0.6695 from overnight.

SEOUL (Reuters) - South Korea's consumer inflation slowed for a second straight month in May to a 10-month low, official data showed on Tuesday, coming in lower than market expectations.

The consumer price index (CPI) in May stood 2.7% higher than a year earlier, slower than a rise of 2.9% in April and a gain of 2.8% tipped in a Reuters survey of economists. It was the slowest annual increase since July.

The index rose 0.1% on a monthly basis, according to Statistics Korea, after no change in April and compared with a 0.2% rise expected by economists.

By product, prices of agricultural products fell 2.5% over the month, but petroleum products rose 0.3% and personal service prices gained 0.4%.

The Bank of Korea said last month inflation would likely be on a downward trend throughout the year despite stronger economic growth, because domestic demand was seen recovering only modestly.

The BOK, which held interest rates steady for an 11th straight meeting in May, is expected to lower its policy rate by 50 basis points (bps) to 3.0% in the fourth quarter of 2024, according to a Reuters poll in May.

Core CPI, excluding volatile food and energy items, rose 2.2% year-on-year, slowing from a 2.3% rise in the previous month and marking the slowest since December 2021.

By Leika Kihara and Takahiko Wada

TOKYO (Reuters) - The Bank of Japan must steadily raise interest rates to guard against the risk of inflation accelerating well above its 2% target, said Takeo Hoshi, an academic with knowledge of the country's monetary policy.

Japan's wage-inflation dynamics are changing in ways unseen in the past with intensifying labour shortages pushing up labour costs and prodding more firms to hike prices, said Hoshi, an economics professor at the University of Tokyo.

Having ended a package of unconventional easing steps in March, the BOJ will keep raising rates to anchor inflation expectations around 2%, and eventually start quantitative tightening, Hoshi told Reuters in an interview on Friday.

"Unless the BOJ raises rates, inflation could accelerate too much. The kind of inflation seen in the U.S. and Europe could very much happen in Japan," said Hoshi, who has close ties with incumbent BOJ policymakers.

"There's a significant risk of inflation exceeding the BOJ's target. That's something the central bank should worry about from now on," he said.

Hoshi declined to say how soon the BOJ could raise its interest rate from current near-zero levels, but said hikes should happen "steadily" given upside risks to inflation.

"In deciding when to shift policy, the BOJ must also take into account how its U.S. and European counterparts move as that could affect asset prices including exchange rates," he said.

Hoshi participated in the BOJ's workshop held on May 21, which was part of a review of the pros and cons of its past unconventional monetary policy. He chaired a session that analysed Japan's economic and price developments.

The BOJ ended eight years of negative rates and a policy capping long-term borrowing costs around zero in March, making a historical shift away from its radical stimulus.

BOJ Governor Kazuo Ueda has said the central bank intends to hike rates to levels considered neutral to the economy, as long as growth and inflation move in line with projections.

Many market players expect the BOJ to raise rates sometime this year with some betting on action as soon as in July.

Expectations of a near-term rate hike pushed up the 10-year Japanese government bond yield to 1.10% on Thursday, the highest since July 2011. The benchmark yield stood at 1.065% on Friday.

Hoshi said the recent rise in 10-year yields was a "good sign" that showed the BOJ's decision to end its bond yield control was allowing yields to be driven more by market forces.

But the BOJ must be careful in communicating a strategy for slowing bond buying, and eventually selling bonds, as the huge size of its holdings could magnify the market impact, he said.

"One idea could be for the BOJ to communicate how it would unload its huge bond holdings in, say, 20 years. In doing so, it needs to remind markets that the plan isn't set in stone, and could change depending on circumstances," Hoshi said.

Japan's core inflation hit 2.2% in April, staying above the central bank's target for more than two years, as companies continued to pass on rising raw material costs to households.

The BOJ has stressed the need to keep interest rates low until inflation becomes driven more by sustained wage hikes and robust domestic demand. Ueda has also said inflation expectations are now around 1.5%, short of the BOJ's 2% target.