Asian monies cold to Japan's stimulus move
Asian monies cold to Japan's stimulus move
SINGAPORE (AFP): A massive economic stimulus package unveiled by Japan failed to give Asian currencies a fillip yesterday as investors remained sidelined awaiting new regional developments.
Trade was lackluster, with regional units slightly firmer against the U.S. dollar from their closes Thursday.
The focus was still on the Indonesian rupiah, even in the absence of firm signals heralding an agreement between Jakarta and the International Monetary Fund (IMF) to unlock badly-needed bailout funds, analysts said.
"There is in a sense a decoupling in the relationship between Japan and the rest of Asia at the moment," said Joanne Chong, a Japan markets analyst for British financial house IDEA.
"The other Asian countries have their own problems to attend to and it isn't so much the question of what Japan can do for them," she added.
Dealers here noted the presence of Hong Kong and Europe-based funds buying up the Singapore dollar and the Malaysian ringgit, which reached a high of 1. 5850 and 3.5700 against the greenback.
The ringgit closed at 3.5850 to the U.S. dollar, up from 3.6050, while the Singapore dollar stood firmer at 1.5900 from 1.5995.
Other gainers were the rupiah at 8,525 from Thursday's close of 8,550, the South Korean won at 1,377 from 1,392, the Thai baht at 38.55 from 38.65, and the Philippine peso at 37.40 from 37.79.
The Taiwan dollar slid to 32.603 to the dollar from its previous close of 32.590.
A dealer with a European bank here warned however that any further indications that Indonesia would reconsider a peg to the rupiah could upset the regional units' fragile gains next week.
U.S. economist Steve Hanke, an adviser to Indonesian President Soeharto is heading to Jakarta this weekend to propose the creation of a new rupiah on which a currency board, a system wherein the rupiah is pegged at a fixed exchange rate to the dollar, would be based.
But Sani Hamid, emerging markets analyst of Standard and Poor's MMS here said such an idea would remain on the backburner as the Indonesians would not want to jeopardize their talks with the IMF.
Currency players also awaited leads on another sticking point to be tackled by the IMF and Indonesia, that of restructuring Indonesia's 73 billion dollars in private corporate debt.
Sani noted that Indonesia was running out of time to negotiate its huge debts and said the IMF, Indonesia's creditors and Indonesia "have to be flexible."
"The markets aren't even looking for details of the restructuring. Even if it's just a logical framework, one that's workable, they will be happy with that," he added.