Asian monies down on Jakarta bomb

Asian monies down on Jakarta bomb

Dow Jones, Singapore

The Indonesian rupiah fell on Tuesday after a bomb blast in the capital claimed several lives and revived security concerns in the region.

Fears that the attack was linked to terrorist groups, some of which have a regional presence, weighed on other Asian currencies as well, especially those of Thailand and neighboring Singapore.

Late in Asia, the dollar was quoted at Rp 8,625, up from Rp 8,490 on Monday.

The Singapore dollar briefly fell to a three-month low after reports of the explosion filtered through the markets. The U.S. dollar was quoted at S$1.7640 late in the session, up from S$1.7587 late on Monday.

Against the Thai baht, the dollar was at 42.07 late in Asia, up from 41.93 baht in the previous session.

A powerful bomb blast outside the Marriott Hotel in central Jakarta killed at least 10 people and wounded another 103, including several foreigners, Indonesian authorities said. Jakarta Governor Sutiyoso said the blast was "very likely" carried out by a suicide bomber.

Philip Wee, a markets strategist at Singapore's DBS Bank, said global asset markets are groping for direction as investors reassess their views about the robustness of the U.S. economic recovery.

With liquidity thinning out during the typical summer slowdown, "caution is creeping in. Generally everyone is looking for an excuse to take profits or pare down risk," he said.

Incidents like the Jakarta explosion will result in a knee jerk reaction, but eventually, economic fundamentals will be the key factor that provides direction for the markets, Wee said.

"We are still quite optimistic about Indonesia," he added.

The Philippine peso resumed its fall after a short-lived respite in the previous session due to mounting security concerns, traders said.

The dollar closed at 54.815 pesos on the Philippine Dealing System, up from 54.800 pesos on Monday.

Traders said the local currency market is still wary of further security threats following the July 27 rebellion by junior military officers and soldiers.

"There's still no sense of normalcy on the domestic front," said a trader with a local bank, noting that persistent rumors of another grab for power have been preventing any recovery in the peso.

Those domestic concerns were exacerbated by the bomb blast in Jakarta.

"There's a knee-jerk reaction to the Jakarta blast, but some dollar inflows capped the U.S. unit's rise toward the close," said a trader with another bank.

A Manila radio report said that immediately after the Jakarta blast, the Philippine presidential office issued a statement alerting the public, the police and the military to possible terror attacks, especially from members of Jemaah Islamiyah, a Southeast Asian group that the U.S. says has links to the al- Qaida terrorist network.

The South Korean won closed at its weakest level in five weeks as banks bought dollars to cover short positions, traders said. Some suspect the government also intervened in the market during the session.

The dollar closed at 1,187.9 won, up from 1,181.1 won on Monday, marking its highest close since July 1.

"We first expected the dollar-won to trade between 1,180-1,183 won," said Koo Sang-Jun, a dealer at KorAm Bank. "It seems that the government stepped in around 1,182 won, pushing the pair higher to 1,184 won."

The New Taiwan dollar weakened on foreign equity outflows and short covering on the U.S. currency by interbank traders, dealers said.

The U.S. dollar closed at NT$34.466, up from NT$34.430 on Monday.