Asian currencies mixed late; bomb blast jolts rupiah

Asian currencies mixed late; bomb blast jolts rupiah

SINGAPORE (Dow Jones): Asian currencies were mixed late
Tuesday after losing some of their earlier gains, as news of a
bomb blast in Jakarta knocked the wind out of the Indonesian
rupiah's sails.

A meeting among Indonesian President Abdurrahman Wahid and top
political leaders in Yogyakarta Tuesday to try to ease political
tensions provided some reprieve for the rupiah earlier in the
day.

However, news of a bomb blast at the residence of the
Philippine ambassador in Jakarta rattled investors, who were
already nervous ahead of Indonesia's national assembly meeting
next week, prompting them to sell down the rupiah, dealers said.

The dollar slipped to below 8,900 rupiah in early trading, but
players attempted another stab at the Rp 9,000 mark following the
bomb blast.

The Philippine peso was also roiled by the bomb attack in
Jakarta, which Indonesian President Abdurrahman, more popularly
called Gus Dur, confirmed was targeted at the Philippine
government. The blast killed two people and left several others
injured, including the Philippine ambassador to Indonesia.

In other markets, the Thai baht recovered slightly after
falling to a fresh 10-month low Monday, while the Singapore
dollar maintained its steady undertone, largely unperturbed by
developments in the region.

The South Korean won was firmer, while the New Taiwan dollar
was weaker.

After being eclipsed by the Thai baht's selloff over the past
week, the rupiah returned to the limelight, as political
anxieties intensify ahead of the People's Consultative Assembly,
or MPR, session that begins Monday.

Earlier Tuesday, leaders of the major ruling coalition parties
met with Gus Dur in central Java in an attempt to cool political
tensions ahead of Monday's assembly session.

While the market initially reacted favorably to Vice-president
Megawati Sukarnoputri's presence at the meeting, following recent
reports of a widening rift between her and the president, the
market remained uneasy, given her silence following the meeting,
dealers said.

Nonetheless, a growing consensus has emerged among analysts
following recent meetings with government and central bank
officials in Jakarta that Gus Dur will likely survive the MPR
session.

While acknowledging that Gus Dur will remain under political
scrutiny, analysts are now toning down their bearish views on the
rupiah.

Steve Brice, an analyst at Standard Chartered Bank, said he is
growing "a little bit uneasy" over his bank's official forecast
that the rupiah could weaken to Rp 9,800 to the dollar in the
next few months.

While the rupiah could slide to Rp 9,300 to Rp 9,400 in the
next few weeks, "any weakness beyond that would be temporary and
limited," Brice said.

In late trade, the dollar was at Rp 8,953, down from Rp 8,965
late Monday and below Tuesday's intraday high at Rp 8,990. Before
word of the bomb explosion made its rounds in the market, the
dollar was hovering around Rp 8,920.

Meanwhile, market participants sold the Philippine peso after
the Indonesian government linked the Jakarta bomb blast to the
ongoing Muslim insurgency in southern Philippines, rather than
political tensions in Indonesia, dealers said.

The dollar closed at 44.860 pesos on the Philippine Dealing
System after hitting an intraday high of 44.900 pesos, up from
Monday's close at 44.835 pesos.

In Taipei, intervention by the central bank, which accounted
for about a third of the day's volume, failed to buoy the New
Taiwan dollar, which ended at a new seven-month low. Concerns
over the slumping local stock market have recently been weighing
on the New Taiwan dollar. The U.S. dollar finished at NT$31.097,
up slightly from Monday's close at NT$31.067, despite aggressive
U.S. dollar selling by the central bank.

In contrast, an influx of foreign funds into the Seoul stock
market and dollar-selling by local exporters propped up the South
Korean won, dealers said. The dollar finished at 1,115.70 won,
down from Monday's close at 1,116.70 won.

Against the Singapore dollar, the U.S. currency was at
S$1.7330, unchanged from late Monday.