Asian currencies advanced, led by Malaysia’s ringgit, as better-than-forecast U.S. and Japanese economic data reduced concern the global recovery is faltering, bolstering demand for emerging-market assets. The MSCI Asia-Pacific Index rebounded from a two-day decline after the Commerce Department reported on Aug. 12 that U.S. retail sales for July rose the most in four months. Japan’s economy shrank less than economists surveyed by Bloomberg estimated, according to data today, signaling that the nation is rebounding from a slump caused by the earthquake and tsunami on March 11. “The much better-than-expected retail sales data gave us a little bit of a reprieve,” said Teck Kin Suan, an economist at United Overseas Bank Ltd. in Singapore. “That will be positive for riskier assets like Asian currencies.” The ringgit strengthened 0.7 percent to 2.9825 per dollar as of 10:26 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. The Philippine peso gained 0.5 percent to 42.448, Singapore’s dollar climbed 0.4 percent to S$1.2069 and Indonesia’s rupiah appreciated 0.3 percent to 8,538. U.S. retail sales excluding autos climbed 0.5 percent, more than the 0.3 percent rise forecast by economists in a Bloomberg survey. Japan’s gross domestic product shrank 1.3 percent in the second quarter from a year earlier, less than the 2.5 percent contraction analysts polled by Bloomberg had predicted. Thai Confidence Rises The ringgit advanced for a fifth day, the longest winning streak in six weeks, before a government report on Aug. 17 that is expected to show Malaysia’s inflation held at a two-year high of 3.5 percent in July, according to the median estimate of economists in a Bloomberg Survey. “This is a trading market,” said Yeo Chin Tiong, head of financial markets at Alliance Bank Bhd. in Kuala Lumpur. “The ringgit’s strength today is helped by the better-than-expected retail sales data in the U.S.” Thailand’s baht rose by the most in two weeks after data released Aug. 11 showed consumer confidence climbed to the highest level in more than four years in July. An index measuring sentiment climbed to 74.4 from 72.3 in June, the University of the Thai Chamber of Commerce said. That was the highest since December 2006. Financial markets in Thailand were closed on Aug. 12 for a public holiday. The baht strengthened 0.2 percent to 29.87 per dollar. “There’s a decrease of fear in the market about the global economic slowdown, but it’s not been completely gotten rid of,” said Disawat Tiaowvanich, a foreign-exchange trader at Bangkok Bank Pcl. “Money will still come into Asia” when volatility subsides, he said. Elsewhere, Taiwan’s dollar appreciated 0.2 percent to NT$28.944 against its U.S. counterpart, while China’s yuan declined 0.05 percent to 6.3924. South Korean financial markets are closed for a public holiday. To contact the reporter on this story: Khalid Qayum in Singapore at kqayum@bloomberg.net Chien Mi Wong in Singapore at cwong303@bloomberg.net. To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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