Asian currencies mixed late as yen keeps some afloat

Asian currencies mixed late as yen keeps some afloat

SINGAPORE (Dow Jones): Asian currencies were mixed late
Monday, finding solace from the yen's mild bounce and anxieties
over regional central banks' next moves, dealers said.

The Indonesian rupiah ended a touch weaker Monday in thin
trading as players bought dollars due to the current political
uncertainty.

The Singapore dollar, the Thai baht and the South Korean won
were marginally higher, and the Philippine peso was slightly
lower. Taiwan's financial markets were closed for a national
holiday.

A victory for Japan's ruling Liberal Democratic Party in the
first critical election since Junichiro Koizumi ascended to its
leadership provided only a marginal boost to the yen.

At 0740 GMT (2.40 p.m. Jakarta time), the dollar was quoted at
Y124.19, below Y124.43 late Friday in New York.

"Economic fundamentals and the prospects for a weaker yen
point to lower Asian currencies, but fears of central bank
intervention are restraining the downward movement," said an
economist at a European bank.

Caution ahead of the Federal Reserve's interest rate decision
Wednesday and a holiday in Hong Kong Monday kept Asian currencies
trapped within tight trading bands, dealers said.

A report in Monday's edition of the Financial Times that the
U.S. might be on the brink of its first recession in a decade
heightened expectations for a 50-basis-point interest rate cut by
the Fed, dealers said.

The dollar closed at Rp 11,365, up from its close Friday at Rp
11,355.

President Abdurrahman Wahid said over the weekend that his
major political opponents had agreed not to push ahead with his
impeachment at a meeting of the nation's highest legislative body
Aug. 1.

But the Indonesian Democratic Party of Struggle, or PDI-P, and
Golkar, the largest parties in parliament, both said the
impeachment in connection with two financial scandals will go
ahead.

The lack of clarity over Wahid's political future is hurting
sentiment toward the rupiah, dealers said.

The Thai baht remained trapped in narrow ranges, albeit with a
firmer bias, as the market remained wary of stricter foreign
exchange reporting requirements without a clear outcome from the
central bank's meeting with onshore banks Monday.

Following the meeting, Thai central bank Assistant Governor
Chetthavee Charoenpitaks said a review of onshore banks'
reporting requirements for transactions of foreign exchange and
securities involving nonresidents hasn't been completed.

At 0845 GMT (3.45 p.m. Jakarta time), the dollar was quoted at
45.160 baht, lower than 45.265 baht late Friday as offshore
participants continued to unwind their long-dollar positions,
dealers said.

Elsewhere, the yen's gains and fears of central bank
intervention - following talk that the Monetary Authority of
Singapore had defended the local currency late last week - pushed
the U.S. dollar below S$1.8200, dealers said.

The Singapore dollar was quoted at S$1.8184 against the U.S.
currency, stronger compared with S$1.8211 late Friday.

Finding support from the yen, the South Korean currency ended
marginally stronger at 1,303 won to the dollar, compared with
Friday's close of 1,303.8 won.

The Philippine peso resumed its recent decline amid persisting
concerns over domestic security and the prolonged hostage crisis
in the south, dealers said. Corporate dollar demand added to the
pressure on the peso, dealers said.

The dollar closed at 52.265 pesos, higher than 52.210 pesos on
Friday.