Asian currencies mixed, yen rally helps some

Asian currencies mixed, yen rally helps some

Alan Yonan Jr., Dow Jones, Singapore

Asian currencies were mixed against the dollar Wednesday, with the South Korean won and New Taiwan dollar strengthening on the back of gains in local stock markets and a late session yen rally.

The Singapore dollar and Indonesian rupiah also advanced, while the Philippine peso and Thai baht lost ground against the U.S. currency.

The dollar, which has dominated currency markets regionally and globally during the past two days began showing signs of fatigue in the afternoon session against both the yen and euro.

The dollar opened the Asian trading day stronger against the yen on the heels of better-than-expected U.S. retail sales data for April and a strong performance in U.S. stock markets. The Nasdaq Composite Index rose 4.0 percent, while the Dow Jones Industrial Average advanced 1.9 percent.

But a follow-up rally on the Tokyo Stock Exchange, as well as news that Japan's current account surplus increased by 52 percent in March from a year earlier, gave investors reason to buy back the yen.

The dollar fell to an intraday low of 128.00 yen after trading as high as 128.60 yen. Near the end of Asian trading the dollar was quoted at 128.15 yen, down from 128.50 yen late Tuesday in New York.

The South Korean won appeared headed for a weaker finish until the late yen rally triggered a round of won buying. Within the last hour of trading the dollar fell from its intraday high of 1,280.1 won to 1,277.5 won at the close, down from 1,279.3 won late Tuesday.

The won also got some help from dollar selling by exporters and net foreign purchases of shares in the local stock market.

The main index of the Korea Stock exchange rose 3.0 percent, with foreigners buying a net 257.5 billion won worth of shares.

Foreign equity inflows generated buying interest in the New Taiwan dollar.

The U.S. dollar ended at NT$34.568, down from Tuesday's NT$34.579.The New Taiwan dollar initially slipped after an earthquake measuring 6.2 on the Richter scale struck Taipei, but the currency quickly recovered when it was learned that no major damage had been caused.

Foreign investors were net buyers of NT$7.1 billion in local shares during the session, spurring the index to rally 2.7 percent and close at its highest level so far in May.

Strength in the yen also boosted sentiment toward the local currency, dealers said.

The Singapore dollar strengthened slightly late Wednesday, after hovering ina tight band. Late in Asia the U.S. dollar was quoted at S$1.8062, down from S$1.8070 late Tuesday.

The U.S. dollar was stuck between S$1.8075-S$1.8085 throughout most of the day, but came under mild selling pressure when it began to fall against the yen near the end of the session.

The Philippine peso weakened amid corporate demand for the U.S. currency. The dollar closed at 49.650 pesos on the Philippine Dealing System, up from 49.600 pesos Tuesday.

The government's higher-than-targeted budget deficit for the first quarter, announced during the session, had a mild negative effect on the peso, dealers said.

The government reported that its budget deficit in the first quarter totaled 61.2 billion pesos, about 15 percent over the 52.9 billion pesos target.

The Indonesian rupiah was largely unaffected by lower-than- expected economic growth figures for the first-quarter.

Near the end of Asian trading the dollar was quoted at Rp 9,255 rupiah, down from Rp,270 late Tuesday.

The government reported that gross domestic product grew 2.47 percent in the first quarter from a year earlier, below economists' expectations of 3.5 percent growth.

Against the baht, the dollar was quoted at 42.900 bath late in Asia, up from 42.885 bath a day earlier. Corporate supply and demand for dollars against the local currency was relatively balanced, as was speculative trade, dealers said.