Japan intervention spoils party for regional bulls<\/p>\n
HONG KONG (Dow Jones): Massive intervention by the Bank of
\nJapan to push the yen lower spoilt what would otherwise have been
\na field day for Asian regional currency bulls Monday.<\/p>\n
The Indonesian rupiah, the Singapore dollar, the Philippine
\npeso and the new Taiwan dollar still managed to end Asian hours
\nhigher on the day, despite the Japanese central bank's action.<\/p>\n
But the South Korean won and the Thai baht both closed lower
\nin parallel with the yen.<\/p>\n
Monday's trading started on a strongly positive note for
\nregional currencies. The admission over the weekend by
\nIndonesia's governing Golkar party that it had lost last week's
\nparliamentary elections, boosted the rupiah to its highest level
\nin six months.<\/p>\n
The rupiah's climb, which saw the U.S. dollar fall to Rp 7,525
\nin early dealing, boosted the Singapore dollar too.<\/p>\n
As the U.S. dollar came under pressure against the yen,
\nfalling to a low of 117.91 yen in early trading, the U.S.
\ncurrency was also sold down against the Singapore dollar. As
\nsuccessive stop-loss sales orders were triggered in thin market
\nconditions, the U.S. dollar dropped to a one-month low of
\nS$1.7040, according to brokers on the island republic.<\/p>\n
The U.S. dollar's fall against the regional currencies was
\nsoon arrested, however, as the Bank of Japan's dollar-buying
\nintervention prompted market players to cover their short
\npositions in the U.S. currency in regional foreign exchange
\nmarkets.<\/p>\n
As the U.S. dollar was propelled back up to levels approaching
\n121 yen against the Japanese yen, it was also pushed higher
\nagainst the Singapore dollar as market players scrambled to cover
\ntheir exposure, hitting a high of S$1.7160.<\/p>\n
With chastened dealers reluctant to establish fresh positions,
\nin case market volatility again catches them wrong-footed, the
\nU.S. dollar is likely to remain range-bound against the Singapore
\ncurrency in the near term. According to one trader at a Singapore
\nbank, market participants will be content to restrict themselves
\nto playing a S$1.7050 to S$1.7150 band over coming sessions,
\nunless the dollar moves decisively higher against the yen.<\/p>\n
Late in Asia the U.S. currency was quoted at S$1.7125, just a
\nfraction lower than S$1.7135 toward the end of local trading
\nFriday.<\/p>\n
Short-covering also lifted the U.S. dollar off its intraday
\nlow against the Indonesian rupiah. Dealers described the U.S.
\ncurrency's rally as halfhearted, however, saying that fresh
\nsellers capped the dollar's rise around Rp 7,600.<\/p>\n
News that presidential front-runner Megawati Soekarnoputri had
\nflown to Singapore for a medical check-up failed to lend the
\ndollar any extra upward momentum, leading dealers to predict that
\nthe U.S. currency was set for another fall.<\/p>\n
\"The dollar's lack of bounce makes me think it could be coming
\nlower,\" said one trader at a U.S. bank in Singapore, warning that
\nif the U.S. currency falls through the Rp 7,500 level, it will
\nencounter little support above Rp 7,200.<\/p>\n
Late in Asian trading, the U.S. currency was quoted at Rp
\n7,565, down from Rp 7,711 toward the end of local trading Friday.<\/p>\n
Among other regional currencies, the Philippine peso
\nappreciated against the U.S. dollar despite the yen's slide, as
\nthe central bank's latest round of interest rate cuts on Friday
\nhelped attract foreign funds into local asset markets.<\/p>\n
At the end of domestic trading in Manila, the U.S. dollar was
\nquoted at 37.855 pesos, down from 37.900 pesos at Friday's close.<\/p>\n
The Thai baht, however, failed to hold on to gains made on
\nFriday, slipping back in line with the fall in the yen.<\/p>\n
Late in Asian dealing, the U.S. dollar was quoted at 36.9700
\nbaht, up from 36.9250 baht late on Friday.<\/p>\n
In North Asia, the South Korean won also fell back in response
\nto the Bank of Japan's intervention, with the U.S. dollar rising
\nto close at 1,170.00 won, up from 1,167.60 won on Friday.<\/p>\n
The new Taiwan dollar, however, shrugged off the fall in the
\nyen, as buying from local exporters repatriating foreign currency
\nrevenues and from foreign institutions investing in Taiwanese
\nequities lifted the local currency.<\/p>\n
At the close, the U.S. dollar was quoted at NT$32.427, down
\nfrom NT$32.459 at the end of the previous session.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/japan-intervention-spoils-party-for-regional-bulls-1447893297",
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