South Korean won, Chinese yuan and Japanese yen notes are seen on U.S. 100 dollar notes in this picture illustration taken in Seoul, South Korea, December 15, 2015. REUTERS/Kim Hong-Ji

June 2 (Reuters) – Bearish bets on Asian currencies reduced on signs that China’s economic pain may abate with easing of COVID-19 curbs, but analysts were still wary of future lockdowns and the direction of U.S. monetary policy, a Reuters poll showed on Thursday.

Short positions on South Korea’s won and the Taiwanese dollar were at their lowest since late-February, while those on the Chinese yuan slipped to a six-week low, according to the fortnightly survey of 11 respondents.

Investor sentiment improved, compared with a fortnight ago, as major Chinese cities including Shanghai rolled back curbs after a two-month lockdown, and as the country unveiled new stimulus measures to bolster its economy. read more

The yuan , whose depreciation had triggered a sell-off in other Asian currencies in mid-April, recovered from a 20-month low it touched a couple of weeks ago.

However, analysts are still sceptic about China’s economic growth.

“I’m not sure (growth) concerns have waned all that much,” said Rob Carnell, head of research and chief economist for Asia-Pacific at ING.

“There is a lot of doubt that this (relaxing curbs in Shanghai) marks the end of China’s problems with COVID-19 and lockdowns.”

Sentiment in Asia was also aided by cooling expectations of aggressive U.S. interest-rate hikes, although worries over inflation and a global recession have festered amid ambiguous signalling from the Fed and its governors. read more

Short positions on the Thai baht were at their lowest since April, ahead of a key central bank meeting next week.

While a relaxation of COVID-19 curbs helped the country’s economy show gradual improvement in May, its headline inflation has already breached the central bank’s target range.

“BOT is yet to signal its intent to normalise policy, but we see a rising risk for a hawkish shift,” economists at DBS wrote in a note, adding that the first hike could come in the fourth quarter of 2022.

Other Asian central banks have moved to tighten policies in recent months amid rising inflationary pressures, an economic rebound from the pandemic, and a hawkish stance from the Fed.

Last week, South Korea’s central bank delivered its second consecutive rate hike and forecast further aggressive increases to wrestle consumer inflation down from 13-year highs. read more

Back-to-back hikes by the Bank of Korea follow more than 100 cumulative basis points of tightening since August 2021 in one of the most forceful tightening campaigns ever by the bank.

The Asian currency positioning poll is focused on what analysts and fund managers believe are the current market positions in nine Asian emerging market currencies: the Chinese yuan, South Korean won, Singapore dollar, Indonesian rupiah, Taiwan dollar, Indian rupee, Philippine peso, Malaysian ringgit and the Thai baht.

The poll uses estimates of net long or short positions on a scale of minus 3 to plus 3. A score of plus 3 indicates the market is significantly long U.S. dollars.

The figures include positions held through non-deliverable forwards (NDFs).

The survey findings are provided below (positions in U.S. dollar versus each currency):

Reporting by Harish Sridharan in Bengaluru

Our Standards: The Thomson Reuters Trust Principles.