BENGALURU (Sept 23): Indonesian equities advanced and the rupiah held onto early gains after the country's central bank delivered a widely expected rate hold, while Asian AI-linked stocks extended their winning streak amid renewed optimism about chip demand. 

Stocks in Jakarta rose 1.4% after Bank Indonesia (BI) kept interest rates unchanged at its first meeting since Destry Damayanti's appointment as governor earlier this month. 

BI said it would optimise currency intervention strategy to stabilise the rupiah, which is down over 6% so far this year, making it the worst performing currency in the region. The rupiah was last up around 0.3% on the day.

The hold had been well telegraphed after the central bank raised rates by 100 basis points between May and June to defend the rupiah. Currency stability alongside on-target inflation have since given policymakers room to pause.

"Not every pressure on the rupiah should be paid for through higher interest rates for the entire economy," said Fakhrul Fulvian, chief economist at Trimegah Sekuritas Indonesia. 

"What is more interesting is how BI is expanding its stabilisation toolkit."

He pointed to BI's decision to raise the incentive on FX swap hedging costs to 25%, calling it consistent with Indonesia's need to attract foreign capital.

Elsewhere, shares in Seoul closed 0.9% higher after a fourth straight session of gains. Korean stocks were buoyed by renewed optimism about chip demand, as strong interest in Meta's new AI agent lifted global AI stocks driving the Nasdaq to a record high on Tuesday.  

Chipmakers SK Hynix and Samsung Electronics, which together make up roughly half the index's value, gained 1.2% and 3.3%, respectively.

Taiwanese stocks rose 0.8%, extending their rally after the benchmark touched an intraday record high in the previous session.

The two benchmarks have staged a spectacular technology rally this year, as massive hyperscaler AI investment and memory chip shortages fuelled chip demand.

Currencies of net oil importers including the Philippines and India treaded water despite a gradual decline in oil prices since Tuesday after sources told Reuters that Saudi Arabia had restarted operations at its East-West Pipeline.

"Markets are waiting for a clearer directional signal on whether the US-Iran situation produces a durable de-escalation," said Inki Cho, financial market strategist at online trading platform Exness.

US President Donald Trump suggested an agreement could come soon amid diplomatic efforts at the UN, but also warned that he could "annihilate" Iran if there is no deal to end the war.

Thailand's baht weakened 0.3% against the dollar after its cabinet on Tuesday approved US$1.29 billion (RM5.26 billion) in spending to extend a consumer subsidy scheme by two months, aiming to ease living costs pressured by rising energy bills. 

The South Korean won weakened 0.8% against the dollar, reversing early gains. 

The pullback looks technical rather than fundamental, Cho said, with some profit-taking after sharp gains. The won has advanced 5.3% so far this year, outpacing most peers, helped by a widening current account surplus and portfolio inflows chasing the AI trade.

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