Asian currencies mostly up on yen, easing political fears
Asian currencies mostly up on yen, easing political fears
SINGAPORE (Dow Jones): Most Asian currencies extended their recent gains late Thursday, basking in the glow of the yen's strength and as political pressures in Indonesia and the Philippines ebbed, dealers said.
Except for the Singapore dollar, which was weaker, regional currencies continued to find comfort in the yen's rise, which continued to be fueled by hopes that Japan's new Prime Minister Junichiro Koizumi will push through long-awaited economic reforms.
But analysts don't expect the euphoria surrounding the new government to last, since a weaker yen would be needed to revive Japan's economy.
The Indonesian rupiah ended slightly higher in thin range- bound trading Thursday, as the market waits to see whether embattled President Abdurrahman Wahid can strike a deal with his political opponents.
The dollar closed at Rp 11,125, down from Rp 11,160 Wednesday, after trading between Rp 11,000 and Rp 11,200.
The U.S. currency fell to its intraday low amid some position- squaring from players that were long on dollar, traders said.
Players had built up long-dollar positions earlier this week in anticipation that Jakarta would explode in street violence amid Parliament's decision to issue a second censure to Wahid over his alleged involvement in two financial scandals.
But Jakarta remained quiet, and the rupiah has moved slightly higher as players liquidated their long positions.
The dollar had fallen to as low as Y121.30 in early Asian trading. At 0830 GMT, the dollar was quoted at Y121.59, down slightly from Y121.64 late in New York Wednesday, and below Y122.10 late in Asia Wednesday. Trading in the yen was quiet due to the Golden Week holidays.
The strength across regional foreign exchange markets failed to inspire the Singapore dollar, which slipped below S$1.8200 against the U.S. currency.
The Singapore dollar, which has recently been a laggard in the region, remained pressured by strong demand for U.S. dollars by local companies seeking to fund their overseas acquisitions, and lingering worries over the fate of the ringgit peg, dealers said.
At 0815 GMT (3.15 p.m. Jakarta time), the Singapore dollar was quoted at S$1.8201, weaker compared with S$1.8180 late Wednesday.
Analysts view Malaysia's decision Wednesday to abolish its 10 percent exit tax on repatriated capital gains for foreign investors as an attempt to relieve the pressure on the ringgit peg's of 3.80 ringgit to the dollar.
The regional currency weakness since the start of the year and Malaysia's shrinking foreign exchange reserves have, over the past several weeks, fueled speculation of a possible devaluation of the ringgit, although government officials have insisted that the currency peg will stay.
The South Korean won was the biggest beneficiary of the yen's gains and continued to outperform its regional peers.
The dollar finished at 1,294.5 won, down from Wednesday's close of 1,302.8 won.
Foreign equity fund inflows and the yen's rise bolstered the New Taiwan dollar, which ended marginally higher at NT$32.89 against the U.S. currency, compared with NT$32.90 Wednesday.
The Philippine peso continued to be soothed by President Gloria Macapagal Arroyo's decisiveness in crushing efforts to unseat her and the swift restoration of order in Manila streets, following violent clashes between security forces and supporters of arrested leader Joseph Estrada Tuesday.
The dollar closed at 50.280 pesos on the Philippine Dealing System, down from 50.730 pesos Wednesday.
The Thai currency was marginally higher at 45.45 baht per dollar, from 45.47 baht late Wednesday.