BENGALURU Most Asian currencies were heading for weekly declines on Friday, although largely unchanged on the day, while stocks rose on optimism about US rate cuts stirred by fresh signs of a cooling labour market.

Regional forex markets lost the ground they gained last week when the dollar weakened from the US Federal Reserve's (Fed) dovish shift following softer-than-expected jobs data for April.

The Philippine peso was largely flat but on course for a weekly decline of 0.3%, having gained nearly 1% last week.

The South Korean won strengthened 0.2%. It is down 0.4% for the week so far after logging two straight weekly gains.

The Malaysian ringgit was largely flat this week, as it pared last week's climb of 0.6%. The central bank kept the interest rate unchanged on Thursday, saying the ringgit's weak performance did not reflect economic fundamentals.

The ringgit has stabilised over the past month after touching 20-year lows. The currency is still down 3.1% for the year so far.

"We reckon that Bank Negara Malaysia likely drew some comfort from the Malaysian ringgit’s regional outperformance over the past month, despite external-driven volatility," analysts at DBS Bank said.

Among other currencies, the Singapore dollar was muted, set for its worst week since early April with a fall of 0.2%. It rose 1% last week.

The Taiwanese dollar inched up on Friday but was poised for a fourth consecutive weekly fall.

Stocks in the region were higher after Thursday's data showed bigger-than-expected US initial claims for state unemployment benefits for the week ended May 4, reinforcing prospects for Fed rate cuts.

Traders are now pricing in two rate cuts of 25 basis points this year versus one before the payrolls data.

South Korean stocks led the gains in emerging Asian equities with a jump of 1.2%, while Singapore stocks rose as much as 1%.

Stocks in Taiwan gained as much as 1%, while Manila shares were up 0.9%.

Bucking the regional trend, both Malaysian and Thailand shares inched 0.1% lower.

Financial markets in Indonesia were closed for a public holiday.

  - Reuters