* South Korea’s Kospi up 1% as tech stocks rise
* Philippines to boost infrastructure spending in 2020 budget
* Turkish lira weakens to lowest level in nearly a month
By Sruthi Shankar
Aug 20 (Reuters) - Emerging market stocks edged higher for a third day on Tuesday, drawing support from signs that major economies will use stimulus to combat slowing growth, while currencies were mixed against a broadly firming dollar.
The MSCI’s index of emerging stocks rose about 0.2%, mirroring moves in global equities, as hints that policymakers are willing to do more to support their economies lifted investor sentiment.
Seoul-listed shares jumped more than 1%, helped by technology companies following reports of Japan approving shipments of a high-tech material to South Korea for the second time since imposing export curbs last month.
Government officials from both sides are set to hold talks this week to resolve a dispute that has battered financial markets.
Chinese stocks pulled back after a strong showing on Monday after the central bank kicked off new interest rate reforms designed to lower corporate borrowing costs.
The yuan also slipped after the central bank set the midpoint rate at 7.0454, below market expectations.
“We believe that recession fears are overdone. But investors should prepare for a more sustained period of lower interest rates,” Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote in a note.
“Overall, the combination of muted growth and low yields creates a conducive environment for carry strategies, in our view.”
The focus now turns to the Jackson Hole seminar where U.S. Federal Reserve chair Jerome Powell is expected to speak, and a Group of Seven summit this weekend for clues on what steps policymakers will take to bolster growth.
The Philippine peso edged higher after its government put to Congress a proposed 2020 budget that lifts spending by 12% from a year earlier.
The Taiwanese dollar was down marginally after data showed export orders for the country fell 3% in July compared to a year ago, but less than the expected 5.9% decline seen in a Reuters poll.
The Turkish lira fell 1.3% to 5.7374, its lowest in nearly a month, after the central bank said on Monday it was reducing the required reserves ratio for banks with loan growth rates above 10% and raising the return on those reserves.
“The negative market response to the credit incentives can be attributed to concerns that the administration intends to rely on the same tools as on previous occasions to generate stronger economic momentum over the short-term horizon,” Rabobank analysts wrote in a note.
Concerns about developments in Syria were also weighing on sentiment, although Turkey’s main stocks index BIST 100 gained as banking shares rose after the central bank move.
South Africa’s rand, meanwhile, jumped 0.5%, after having shed about 8% so far in August, making it among the worst performing currencies this month with only Argentina’s peso faring worse.
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For RUSSIAN market report, see (Reporting by Sruthi Shankar in Bengaluru)