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.