BENGALURU (Sept 11): Emerging Asian stocks and currencies extended losses on Friday as surging oil prices raised inflation concerns, ahead of US inflation data later in the day.

The MSCI EM Asia equities index fell 1.6% to a one-week low, while a gauge of Asean stocks hit a one-month low.

Brent crude rose to a four-month high of US$109.97 a barrel after surging 6% overnight, raising inflation risks and expectations that interest rate cuts could be delayed. Global bonds sold off, sending yields sharply higher.

Yields on 10-year government bonds across emerging Asia extended their rise, with India's reaching 7.022%, the highest since early June. 

Malaysia's benchmark yield hovered near a three-year high, while Thailand's touched its highest level since early June.

Among regional equities, net energy importers South Korea and Taiwan ended down 1.8% and 1.6%, respectively.

Singapore stocks fell as much as 0.4% to a three-week low, tracking losses for a fifth consecutive session. Stocks of other regional energy-dependent countries such as Thailand and Philippines declined 0.9% each. 

Jakarta stocks tanked 1.9% to a two-week low, and stocks in Kuala Lumpur dropped as much as 1.2% to the lowest since mid-July.

Currencies extended declines, with the MSCI gauge of emerging market currencies falling 0.2%.

The Malaysian ringgit weakened to 4.063 a dollar, and the Taiwan dollar hit its lowest in a week at 31.698 a dollar. 

The rupiah also weakened 0.3% to 17,590 a dollar, while the peso edged higher. The Singapore dollar was flat and the Thai baht edged higher.

The won strengthened to as much as 1,344.24 per dollar.

"...Asia forex and rates markets have been quite benign so far despite the rise in US Treasury yields, but given the drivers of markets more recently we think the probabilities are that this resilience may not continue at least in the near term," Michael Wan, a senior currency analyst with MUFG, said in a note. 

Focus is on US inflation data due later in the day, as it could shape the case for a Federal Reserve rate hike next week. 

Markets expect headline inflation to rise 0.4% month-on-month, with core CPI expected to rise 0.2% month-on-month, unchanged from the prior reading, said Dilin Wu, strategist at Pepperstone. 

If inflation comes in notably above expectations, markets could push the probability of a September hike toward 85%, and the dollar and Treasury yields could extend their gains, Wu said.

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