Asian currencies mostly down on yen fall; IDR bucks trend

Asian currencies mostly down on yen fall; IDR bucks trend

SINGAPORE (Dow Jones): The Japanese yen's slump to its lowest level this year dealt a blow to most Asian currencies late Wednesday, with the South Korean won and the New Taiwan dollar feeling the brunt of the pain, dealers said.

While all the other regional currencies were weaker, the Indonesian rupiah bucked the trend, thanks to support from local state banks, dealers said.

After rising to an intraday high of Rp 9,555 on demand from local banks, the dollar closed at Rp 9,450 in Asia, down from its close Tuesday at Rp 9,510.

State banks sold the dollars heavily at Rp 9,500. Although the central bank didn't confirm the intervention, it had said previously it will sell dollars whenever the rupiah weakens beyond the Rp 9,500 level.

Local banks, including nationalized PT Bank Central Asia and PT Bank Bali, had pushed the dollar to its highs earlier in the day, saying they were buying on behalf of corporate clients.

Private companies still need dollars to settle foreign debts before the year end.

But fears of central bank intervention pushed players to take profit on long-dollar positions at these higher levels. State bank selling further pushed the dollar lower.

Bank Indonesia Deputy Governor Miranda Gultom confirmed late Wednesday that the central bank sold dollars in Tuesday trade to state-owned oil giant Pertamina.

A weaker-than-expected quarterly tankan survey of business sentiment by Bank of Japan and a U.S. Supreme Court ruling that all but sealed the election of George W. Bush as the next U.S. president sent the yen reeling to a year low of Y112.55 against the dollar, dealers said.

Around 0750 GMT, the dollar was at Y112.43, up sharply from Y111.47 late Tuesday in New York.

"The weaker yen hit sentiment toward the Korean won and the Taiwan dollar," said Mansoor Mohi-uddin, a regional currency strategist at UBS Warburg.

Strong gains on the Seoul bourse early Wednesday initially failed to counter the downward pressure on the won, which yielded to an offshore assault from the non-deliverable forward market, dealers said.

"Despite foreign equity purchases and a nearly 3 percent rally in the Kospi stock index, the Korean won attached itself to the yen and headed lower," said Peter Redward, a currency strategist at Deustche Bank.

After pulling back from around the 1,200 won mark on long dollar liquidation, the U.S. currency was at 1193.30 won, up from 1,190.30 won Tuesday.

Heavy intervention by Taiwan's central bank, which accounted for close to half of the session's volume, helped alleviate the stress on the local dollar coming from the floundering yen, dealers said.

The U.S. dollar ended at NT$33.081, down marginally Tuesday's close of NT$33.088. Trading volume was US$535.5 million.

Against the Singapore dollar, the U.S. currency was at S$1.7374, up from S$1.7347 late Tuesday.

Suspected intervention by the Monetary Authority of Singapore Tuesday around S$1.7320, to curb the local dollar's recent strength, also contributed to the reversal in the local dollar's recent ascent, dealers said.

In the Thai currency market, the dollar edged up to 43.625 baht, from 43.520 baht late Tuesday.

The Philippine peso closed lower in thin trade, with the market cautiously tracking President Joseph Estrada's impeachment trial.

The dollar closed at 49.975 pesos on the Philippine Dealing System, up from 49.850 pesos at the previous close.