Asian currencies stronger in late trading<\/p>\n
SINGAPORE (Dow Jones): Asian currencies were sharply stronger
\nin late trading Friday, as U.S. dollar and yen-denominated
\ninvestment flows seeped back into the region.<\/p>\n
The start of the fourth business quarter - the second half of
\nJapan's fiscal year - marked a sea change in capital flows,
\ntraders said, as hedged positions for yen-denominated debt
\npayments were unwound and Japanese corporate, armed with a
\nstronger yen, renewed direct investment across the region.<\/p>\n
\"There is no reason to hedge the yen positions now that debt
\npayments have been satisfied, so people are cashing out of their
\nlong (U.S.) dollar and yen positions,\" said Jimmy Koh, regional
\neconomist at IDEA Global.com in Singapore.<\/p>\n
Traders said the regional currency markets have also digested
\nnews of the now-contained nuclear accident in Japan, and are
\nfocusing on whether the Bank of Japan is prepared to increase
\nmarket liquidity as the yen once again starts drifting toward
\nY100 to the U.S. dollar.<\/p>\n
Japanese officials said during last weekend's meeting of
\nfinance ministers from the Group of Seven leading industrial
\nnations that they were prepared to do just that if yen strength
\ncontinued to be a factor.<\/p>\n
At 0800 GMT, the U.S. dollar was trading at 105.87 yen, above
\n105.61 yen late Thursday in Asia, but well below 106.32 yen at
\n0000 GMT Friday - the level reached as a result of knee-jerk yen-
\nselling when news of the nuclear accident reached the markets
\nlate Thursday.<\/p>\n
Investors are now awaiting the release Monday of the quarterly
\nTankan survey of business sentiment in Japan and Tuesday's U.S.
\nFederal Open Market Committee meeting, traders said.<\/p>\n
A peaceful start to the meeting of Indonesia's highest
\nlegislative body Friday also prompted the liquidation of long
\nU.S. dollar positions by offshore banks, pushing the U.S. dollar
\ndown more than 4 percent against the rupiah.<\/p>\n
At 0800 GMT, the U.S. dollar was trading at Rp 7,985, well
\ndown from Rp 8,360 in late trading Thursday. The assembly now
\nbegins the task of choosing the next president and setting the
\nnation on the unfamiliar path to democracy.<\/p>\n
The release of strong economic data underpinned buoyant market
\nsentiment. Falling food prices pushed the country's consumer
\nprice index down by 0.68 percent in September, leading to a year-
\non-year inflation rate of just 1.25 percent - the lowest level in
\n15 years.<\/p>\n
But, \"The market is still thin, still cautious; any shock to
\nthe system - financial, political, social - will quickly push the
\nU.S. dollar higher,\" warned a currency strategist at a European
\nbank in Singapore.<\/p>\n
The U.S. dollar is also trading at 40.7050 Thai baht, down
\nfrom 41.075 baht late Thursday in Asia. Traders said there is no
\nreason for the U.S. dollar to remain strong against the baht now
\nthat yen-denominated debts have been satisfied, allowing hedged
\npositions to be unwound.<\/p>\n
Thailand's deputy prime minister, Supachai Panitchpakdi, said
\nFriday that strong economic fundamentals should also continue to
\nbuoy the baht. He said the country's low inflation, consistent
\ntrade surpluses, substantial foreign exchange reserves and a rise
\nin investment will support the currency.<\/p>\n
Maya Pinto, regional economist at IDEA Global.com, expects the
\nU.S. dollar to continue to languish against the baht.<\/p>\n
On the Philippine dealing system, the U.S. dollar was trading
\nat 40.7050 pesos, down from 40 pesos late Thursday.<\/p>\n
In North Asia, the U.S. dollar is trading at 1,216 won, almost
\nunchanged from 1,215.9 won late the previous day.<\/p>\n
The U.S. dollar was also trading at NT$31.779, almost flat
\nfrom NT31.778 late Thursday.<\/p>\n
Desmond Supple, regional economist at Barclays Bank in
\nSingapore, said the New Taiwan dollar has showed resistance to
\nthe financial aftershock of the recent earthquake.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asian-currencies-stronger-in-late-trading-1447893297",
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