Asian monies mostly lower despite yen rebound<\/p>\n
Dow Jones, Singapore<\/p>\n
Despite a recovery in the Japanese yen, most Asian currencies
\nthat were open for trade Tuesday posted mild losses against the
\nU.S. dollar.<\/p>\n
Traders said corporate demand for dollars in the Philippines
\nand Thailand weighed on their currencies, while the Indonesian
\nunit was unchanged.<\/p>\n
Trading volumes across the region were lower than normal as
\nmarkets in China, Malaysia, Hong Kong, South Korea, Taiwan and
\nSingapore were closed for Lunar New Year holidays.<\/p>\n
Most markets in the region will remain shut Wednesday.<\/p>\n
The yen rose against the dollar, helped by repatriation flows
\nas Japanese companies sought to improve their balance sheets
\nahead of the fiscal year-end book-closing on March 31.<\/p>\n
Concerns about credit quality in the U.S. banking sector,
\nspecifically unconfirmed rumors that a major institution might be
\ndowngraded by rating agencies due to its exposure to corporate
\nfailures including Enron, K-Mart and Global Crossing, also dented
\nsentiment toward dollar-yen.<\/p>\n
In the shorter term, the dollar is likely to continue its
\ncorrection against the yen, as concerns over developments in
\nArgentina and the widening Enron scandal in the U.S. cloud the
\noutlook for the greenback, said Noriyuki Fujita, head of foreign
\nexchange at Societe Generale in Tokyo.<\/p>\n
Late Tuesday, the Japanese government released a study paper
\nwhich calls on the government and central to take drastic steps
\nto clear bad loans from banks' balance sheets and provide
\nliquidity to financial markets to prevent the economy from
\nfalling into a deflationary spiral.<\/p>\n
The government study paper, warning of a vicious circle of
\nprice falls and economic deterioration, was scant on details but
\nis expected to lay the groundwork for promised steps to combat
\ndeflation. The paper was presented to a meeting of Prime Minister
\nJunichiro Koizumi's top economic panel, which Economy Minister
\nHeizo Takenaka said would flesh out anti-deflation measures. That
\npackage, expected out this week, reportedly will include steps to
\naccelerate bad loan disposals, perhaps including the use of
\ntaxpayers' money to replenish banks' depleted capital.<\/p>\n
At 0930 GMT (4.30 p.m. Jakarta time) the dollar was at 133.40
\nyen, down from 134.45 yen a day earlier.<\/p>\n
Recent yen weakness - due in part to a perceived Ministry of
\nFinance policy to help Japan export its way out of recession -
\nhurt Asian currencies, preserving some of their exporters' price
\ncompetitiveness versus Japan.<\/p>\n
The rise in the yen Tuesday, however, failed to lift the peso
\nand baht as corporate dollar demand remained strong.<\/p>\n
The dollar closed at 51.340 pesos on the Philippine Dealing
\nSystem, up from 51.315 pesos Monday.<\/p>\n
Traders said corporate demand for dollars was strong under
\n51.400 pesos.<\/p>\n
The baht was marginally lower against the U.S. dollar late in
\nAsian spot trade at 43.93 compared to 43.885 baht a day earlier.<\/p>\n
The rupiah was flat against the dollar at 10,200, helped by
\nsuspected dollar sales by agents of the Indonesian Bank
\nRestructuring Agency, which lifted the local currency from its
\nsession low.<\/p>",
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"sponsor": "Okusi Associates",
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