Asian currencies mixed, North Asia tracks lower with yen
Asian currencies mixed, North Asia tracks lower with yen
Dow Jones, Singapore
Weakness in the yen Thursday on heightened anticipation the Bank of Japan will ease monetary policy even further pushed North Asian currencies lower.
Currencies in Southeast Asia, however, rose slightly on increased optimism about a U.S. recovery in the second half of this year, which has prompted foreign fund managers to buy regional equities in recent weeks.
While the yen remains a drag on the won and New Taiwan dollar - the currencies of nations that compete with Japan in export markets including electronics, technology and autos - its influence on Asian currencies is diminishing.
Most analysts expect the yen will 'decouple' from other Asian currencies as Japanese economic prospects diverge markedly from the rest of the region, which largely appears poised to benefit from a U.S.-led rebound in global demand.
Nevertheless, the scale of yen losses early Thursday was sufficient to dent sentiment toward the South Korean and Taiwanese units for most of their respective trading sessions.
The yen dropped as low as 134.18 against the U.S. dollar from 133.46 yen in early Asian trade, before recovering late in the day. At 1100 GMT (5 p.m. Jakarta time) the dollar was at 133.72 yen.
The only reason the yen didn't fall further during the session to the detriment of the other North Asia units is because of a belief that the Ministry of Finance doesn't want to see the yen drop too sharply ahead of a two-day meeting of finance ministers from the Group of Seven industrial nations starting Friday in Ottawa.
As it stands, Finance Minister Masajuro Shiokawa said he expects a hot reception from other participants over the government's handling of the economy. If the yen was to slump to fresh three-year lows during the summit it would be an embarrassment for the Finance Ministry, so traders expect it will make sure any weakness in the interim is gradual.
This helped the yen to recover late in the session.
But this came too late for the New Taiwan dollar, which ended trade in Taipei at NT$35.029 against the U.S. dollar, compared with NT$35.016 Wednesday.
In South Korea, the central bank's decision to keep its key call rate at 4 percent went almost unacknowledged in the market, as it was widely expected, dealers said.
The dollar closed at 1,318.2 won, up from Wednesday's close of 1,316.7 won.
In Southeast Asia, the dollar closed at Rp 10,292, down from its close Wednesday of Rp 10,315.
The dollar late in the day was at 43.875 baht, down from 43.965 baht a day earlier as foreign investor buying of local stocks buoyed sentiment toward the currency.
Elsewhere, the U.S. dollar was at S$1.8326, down from S$1.8336 late Wednesday, and ended Manila trade at 51.185, peso down from 51.203 peso Wednesday.