Shares in Manila and Seoul led gains among Asian equities on Wednesday, and most local currencies firmed against the U.S. dollar, as easing tensions between Russia and Ukraine improved the sentiment for riskier assets.

Both the Philippine  and South Korean indexes  surged nearly 2% each to log their best days in two weeks, while the Taiwanese benchmarkclimbed about 1.4%.

Among currencies, the South Korean won  rose 0.2% after the East Asian nation reported a decrease in its unemployment rate, the Indian rupee firmed 0.4%, while the Indonesian rupiah  and the Philippines pesoedged higher.

Investors globally were relieved after Russia late on Tuesday indicated it was returning some troops to base, easing tensions over a potential war in Ukraine.

Attention now turns towards the U.S. Federal Reserve meeting minutes to be released later in the day for any potential clues on the pace of U.S. interest rate hikes.

Meanwhile, data showed U.S. producer price inflation surged in January at twice the expected rate, reinforcing expectations that the Fed will aggressively hike rates. Markets have already priced in a 50 basis point hike in March.

"While the higher-than-expected U.S. PPI was shrugged off by markets which have their focus on the easing geopolitical tensions, the Fed minutes release will provide the next test for markets, which will be clearly set to carry a hawkish bias," analysts from IG Group said in a research note.

The Chinese benchmark .SSEC gained about 0.7% as factory-gate inflation cooled more than expected in January, and was its slowest rate since July, which could point to further policy easing by the nation's central bank.

Additionally, Asia's largest economy said it will work with other regional countries to beef up the use of local currencies in trade and investment, as part of plans to strengthen regional economic resilience.

The Singapore market .STI fell as much as 0.3% earlier, as the island state reported a single-day record high in COVID-19 cases on Tuesday. It, however, reversed its losses and rose about 0.2% later in the trading session.

Shares in Indonesia .JKSE got a boost, by rising about 0.5% after the central bank governor reiterated that it will maintain its benchmark rate at a record low of 3.5%, until it sees early signs of inflationary pressures.

Elsewhere, the Malaysian ringgit  came under pressure due to lower Brent crude prices, while the Singaporean dollar  remained flat.

Markets in Thailand , were closed on account of a public holiday.

HIGHLIGHTS

** Indian shares flat as markets look for fresh triggers

** Indonesia's 3-year bond yield rises to 4.419%

** G20 host Indonesia promotes FX diversification as part of stimulus exit

 

(Reporting by Archishma Iyer; Editing by Shailesh Kuber) ((Archishma.Iyer@thomsonreuters.com;))