* Japan, Taiwan activity slows, Korean exports weakest since2016
* China private manufacturing survey more upbeat thanofficial one
* Lunar New Year distorts data; slowdown may be temporary
* Asian exporters concerned over strong currencies, Chinatightening
By Marius Zaharia
HONG KONG, March 1 (Reuters) - Manufacturing data painted amixed picture of economic activity in Asia, with strongcurrencies hurting exporters in South Korea, Japan and Taiwan,while China surprisingly showed resilience amid fears tighterregulations may slow growth.
The Lunar New Year holidays disrupted activity, suggestingthat the slowdown in some of the economies could be temporary.
There were worries remained that the dollar's broad weaknesscould hinder the regions export-driven economies, thoughmanufacturing surveys in the United States and Europe later onThursday were expected to confirm the strong momentum in globaltrade.
Also, the full impact of China's crackdown on riskyfinancing is likely yet to be seen.
Japanese manufacturing expanded at a slightly slower pace inFebruary as a stronger yen weighed on new export orders andTaiwan's factory growth was the slowest in four months, althoughboth economies still posted relatively solidnumbers. Korea's export growth slowed in February to itsweakest in more than a year. Japanese yen JPY= is currently trading around itsstrongest in more than a year, the Korean won KRW= in morethan three years and the Taiwanese dollar TWD= in more thanfive.
"For Asia, the strength of the currencies will have someimpact but generally how growth in the G3 economies fares ismore important," said Khoon Goh, head of Asia research at ANZ.
"We should continue to see a strong momentum in exportsgoing into the second half, when base effects come into play,"Goh said, cautioning against reading to much into theholiday-distorted numbers.
In the absence of any signs of an acceleration in growth,however, markets remain of the view that central banks in Asiawill significantly lag the Federal Reserve in hiking rates thisyear. chief Jerome Powell, in his first public appearancesince talking the helm at the U.S. central bank, said this weekthat he aimed to prevent the economy from overheating, cementingmarket expectations for three or four interest rate increasesthis year. for rate hikes in Asia are far fewer.
Bank of Japan board member Goushi Kataoka cautioned onThursday against a premature exit from the BOJ's ultra-loosemonetary policy and called for a ramping up of the bank'smassive stimulus programme. SURVEY DIVERGENCE
In China, a private survey showed on Thursday factory growthat a six-month high, but the findings were largely at odds with downbeat official activity readings on Wednesday, which raisedconcerns that tighter regulations may lead to a sharper slowdownin the world's second biggest economy. divergence might be explained by the fact that theprivate survey captures more of the activity of small and mediumfirms in the private sector, while the official survey focusesmore on large state-owned enterprises, analysts say.
The state-owned firms service the domestic demand more andtheir weaker showing may point to weakness stemming fromproperty-cooling measures, higher interest rates and tougherrules against risky financing, factors which are expected toweigh throughout the year.
Government measures to reduce pollution over the winter havealso led to cuts in production, economists said.
"The big picture is that while the survey data havegenerally been strong during the past year, we don't expect thatstrength to be sustained in coming quarters," said JulianEvans-Pritchard, senior economist at Capital Economics.
ING analysts were more upbeat, however, pointing to the factthat even the weaker private survey showed manufacturers'expectations of future activity were still solid.
"These numbers imply that the low reading is likely drivenby holiday effects, rather than by any underlying slowdown incoming manufacturing activity," said Iris Pang, Greater Chinaeconomist at ING.
In smaller economies, Vietnam's activity was at a 10-monthhigh, Indonesia's was at a 20-month high, while Malaysia'scontracted.