There will be a further 32 money tightening moves across Asia this year - compared to 22 all of last year; with most Asian central banks increasing interest rates by another 100 to 125 points, according to DBS Bank.

Asian governments are going all out to tame inflation, which is in double digits in Vietnam and also stubbornly high in India and Indonesia.

DBS expects a further four rounds of interest-rate increases in most Asian countries except Malaysia, which it expects to raise rates twice more.

The bank adds that interest rates in Asia are returning to pre-crisis levels, though they still have some way to go.

For instance, India's benchmark interest rate is currently 6.75 per cent. It was 9 per cent before the collapse of Lehman Brothers in September 2008, following which it was pared down to 6 per cent.

Meanwhile, the policy rate in Indonesia is 6.75 per cent, compared to the peak rate of 9.5 per cent in the fourth quarter of 2008.

"We are about halfway through the tightening cycle that asia began in march last year. Getting monetary policy back to normal is good for economies and it is good for markets and i think markets are finally coming to understand that too," said Mr David Carbon, managing director of Economic & Currency for DBS Bank.

DBS says the disaster in Japan may mean a spell of heightened volatility for some Indonesian equities.

Ms Joanne Goh, regional equity specialist for DBS Bank, said Japan's quake would impact Indonesia's presence in Asia, mainly for autoparts and electronic components, especially for Indonesia's Astra - that sells materials to Japan and mainly sources to Toyota.

Ms Goh added that Indonesia's coal industry would be impacted as well due to its large imports to Japan and the rest of the region.

DBS also expects the US Federal Reserve to raise interest rates early next year, as the recovery in the world's biggest economy gains traction.

The bank says this will have little impact on Asian growth.

channelnewsasia.com