Asian monies down on yen, threat of war

Asian monies down on yen, threat of war

Nirmala Menon, Dow Jones, Singapore

Asian currencies were on a softer note late Monday, tracking
the yen in quiet trading underscored by a reluctance among market
players to take strong positions ahead of the Sept. 11
anniversary, coupled with the threat of a war with Iraq.

The Singapore, Taiwan, Philippine and Thai currencies lost
ground, while the Indonesian rupiah and the Korean won remained
steady.

Earlier, the Nikkei 225 Stock Average's 1.9 percent rise
resulted in some selling on the dollar/yen, which helped lend
support to some Asian units, notably the Singapore dollar and to
some extent the Thai baht.

But by late Monday, geopolitical concerns reigned uppermost in
the minds of market players.

Among others, they fear that rising oil prices from the
prospects of a war may crimp economic growth in Asian countries,
especially those that are oil importers, as well as raising the
specter of higher inflation.

In Taiwan, where trading resumed after Typhoon Sinlaku forced
markets to close Friday, interbank players covered short dollar
positions amid concerns about the threat of war between the U.S.,
its allies and Iraq.

The dollar ended at NT$34.254, up from NT$34.122 Thursday, in
dealings valued at US$461 million, compared with US$473 million
previously.

"Wars usually are negative for the Taiwan dollar," especially
in the Middle East, as Taiwan relies heavily on the oil imports
from that region, a dealer at a Taipei-based foreign bank said.

Importers and foreign equity investors also bought the U.S.
unit, in part due to weakness in the yen.

Local players monitor the yen closely, as Taiwan competes with
Japan in several export categories, and Taiwan imports large
amounts of goods from Japan.

A weak yen and higher corporate demand for dollars weighed on
the Philippine peso, which briefly breached the key 52
pesoslevel.

The dollar closed at 51.955 pesos on the Philippine Dealing
System, up from 51.860 pesos Friday, after moving within a range
of 51.880 pesos and 52.020 pesos. Volume was steady at $132.17
million from $132.28 million Friday.

Meanwhile, dollar short covering on concerns over the threat
of war with Iraq lifted the U.S. unit to 42.40 baht at the Asian
close, from 42.30 baht Friday.

The dollar was also up against its Singapore counterpart in
line with the regional trend.

Remarks by Deputy Prime Minister Lee Hsien Loong on how a
possible war in Iraq could also hurt the city state's economic
recovery also weighed on the local dollar.

Late in Asia, the dollar was quoted at S$1.7506, from S$1.7482
Friday.

Elsewhere, the dollar was steady against the Indonesian rupiah
in thin trading amid a lack of fresh news.

Dealers said dollar demand from local companies for repayment
of foreign debt was offset by local and state-owned banks selling
the U.S. currency as bids started to evaporate near Rp 8,880.

At the Asian close, the dollar was unchanged at Rp 8,865 after
trading in a narrow range of between Rp 8,860 and Rp 8,880.

The dollar was also flat against the South Korean won in light
trade due to a lack of fresh factors, ending at 1,196.9 won,
virtually unchanged from 1,196.8 won Friday.