Asian currencies down late as yen slides to 3-week lows
Asian currencies down late as yen slides to 3-week lows
SINGAPORE (Dow Jones): Asian currencies suffered another round of bruising late Thursday as the dollar extended its rebound against the yen to hit three-week highs.
But the dollar's achievements against its Asian counterparts were relatively modest compared with its sharp ascent versus the yen, amid doubts over the sustainability of the dollar's rise in the short term, dealers said.
News that Moody's Investors Service placed its rating on Japanese sovereign debt on negative review for a downgrade provided more fuel for the dollar's rise to around 121.50 yen
At 0850 GMT (3.50 p.m. Jakarta time), the dollar was quoted at 121.13 yen, above 120.67 yen late Wednesday in New York. The dollar was at 119.73 yen late Wednesday in Tokyo.
The dollar also drew its vigor from U.S. Treasury Secretary Paul O'Neill's reaffirmation Wednesday of Washington's strong dollar policy. Ahead of his meetings with Asia-Pacific Economic Cooperation finance ministers in China Friday, and the Japanese finance minister in Tokyo Sept. 12, his remarks stoked speculation of coordinated intervention to further weaken the yen.
The Indonesian rupiah closed slightly higher in thin dealing Thursday on profit-taking against the dollar amid a lack of fresh leads to trade on, dealers said.
The dollar closed at Rp 9,030, down from its close Wednesday at Rp 9,070.
Dealers said market participants unwound their long dollar positions as demand from local companies subsided.
"Dollar demand from local companies was very meager in the last two days (and) the dollar lost steam," said a dealer with a foreign bank. "There were no fresh news either to trade (on)."
Dealers added that Bank Indonesia didn't intervene Thursday to help the local unit.
The dollar is expected to trade in a narrow range of Rp 9,000 and Rp 9,150 Friday due to a lack of fresh incentives, dealers said.
The Singapore dollar, which has recently been the most sensitive to the yen's fluctuations compared to its regional peers, felt the brunt of the Japanese currency's slide, as it slumped past the psychologically important S$1.7500 support level.
The U.S. dollar was at S$1.7513, compared with S$1.7463 late Wednesday.
Earlier, corporate sell orders for U.S. dollars around $1.7550 and long liquidation of the U.S. currency by U.S. names had stymied the U.S. dollar's advance, dealers said.
The Thai currency fell under the sway of the tottering yen and the Singapore dollar, weakening past 44.500 baht to the dollar, dealers said.
Exporter dollar sales around 44.550 baht-44.600 baht and the U.S. currency's pullback from its intraday highs, however, helped the baht recoup part of its earlier losses, dealers said.
At 0945 GMT (4.45 p.m. Jakarta time), the dollar was at 44.480 baht, higher than 44.285 baht late Wednesday.
With South Korea's foreign exchange participants fixated with the yen's movements, the won barely reacted to the Bank of Korea's decision to leave its one-day call rate unchanged at 4.50 percent. Most economists had expected a rate cut.
The dollar finished at 1,286.9 won, up from Wednesday's close of 1,282.0 won.
The New Taiwan dollar suffered a double whammy from the yen's fall and a 2 percent slide on the local stock market, dealers said.
The U.S. dollar ended at NT$34.616, higher than NT$34.578 Wednesday, in dealings valued at US$420 million.
The central bank, which regularly intervenes to smooth any currency volatility, sold a relatively modest US$10 million during the session.
On the Philippine Dealing System, the dollar closed at 51.335 pesos, up from 51.170 pesos Wednesday.