Asian currencies up late as yen gains ground

Asian currencies up late as yen gains ground

Nirmala Menon, Dow Jones, Singapore

Asian currencies shrugged off early losses to trade mostly higher late Thursday, taking the cue from the yen's recovery.

Several local developments, notably an upgrade of Indonesia's sovereign rating, were ignored by foreign exchange participants who preferred to look to the major currencies for direction amid jitters over possible U.S. military action against Iraq.

In late Asian hours, the dollar was trading at Rp 8,865, unchanged from Wednesday's close, but below the day's high at Rp 8,884 reached in the morning.

Traders said the rupiah's intraday gains were helped by the central bank which sold dollars near the intraday high.

However, the dollar's downside was protected at Rp 8,550 by local companies with foreign debt, as well as importers. The dollar should trade between Rp 8,550 and Rp 8,900 Friday, traders said.

In the Philippines, the dollar closed at 51.72 pesos on the Philippine Dealing System, down from 51.845 pesos Wednesday.

"What will have more of an impact on the currency market is the movement in the yen," a bank dealer in Manila said.

Analysts agreed, noting that Asian units will likely to continue taking the cue from the major currencies.

But heightened risk aversion ahead of the first anniversary of the Sept. 11 terrorist attacks in the U.S., and prospects of the U.S. launching a war against Iraq kept market participants jittery.

In South Korea, dollar sales linked to the non-deliverable forwards market, coupled with the yen's firmer tone, weighed down the U.S. currency, dealers said.

The dollar ended at 1,191.0 won, down from 1,195.3 won at the previous day's close, after trading between 1,190.0 won and 1,198.0 won intraday.

"The market is basically watching dollar/yen, but again, lots of players don't want to escape from the 1,190 won to 1,210 won range," said Oh Suktae, a Citibank economist.

The U.S. currency also slipped against the Singapore dollar and the Thai baht, both of which tracked the yen higher.

As of 1022 GMT (5.22 Jakarta time), the dollar was quoted at S$1.7438, down from S$1.7455 Wednesday. Against the baht, the dollar was quoted at 42.13 bath, from 42.18 bath previously.