Asian monies mixed late, outperform yen's decline
Asian monies mixed late, outperform yen's decline
Netty Ismail, Dow Jones, Singapore
Asian currencies were mixed late Wednesday after clambering
off their intraday lows, as the dollar remained well-bid against
the yen even as it took a breather from its runup to new 39-month
highs Tuesday.
Asian currencies will likely continue to outperform the yen
amid expectations that the region's economies will be in a better
position than Japan to benefit from a cyclical upswing, said
David Simmonds, a regional currency strategist at Salomon Smith
Barney/Citibank.
As long as the dollar remains below the psychologically
important 135 yen threshold - which is likely to hold for now -
the pressure on Asian currencies will remain relatively
contained, he added.
As such, Asian policy makers can probably still cope with the
yen at current trading levels.
"If the dollar goes through 135 yen, or to the late 130s yen,
then the level of uncertainty and unhappiness will go
significantly higher," said Simmonds.
North Asia already appears to be stepping up its vigilance, as
the yen languishes past 134 yen currently.
After the won floundered to a nine-month closing low Tuesday
and the yen's descent to fresh 39-month lows, South Korea's
Finance and Economy Minister Jin Nyum said Wednesday that he will
discuss the yen during a May meeting with his counterparts from
China and Japan.
The South Korean minister also warned, at a luncheon meeting
with representatives from the foreign media, that the government
may intervene in the foreign exchange market if the won moves
sharply against major currencies.
Wednesday, the dollar ended at 1,331.2 won, little changed
from Tuesday's finish of 1,331.4 won. Earlier, however, the won
had slid to as low as 1,335.3 won as the yen's weakness cast a
shadow on the South Korean currency.
Against the won, the yen ended at 9.91 won.
As foreign exchange participants remained fixated with foreign
exchange-related comments from Japanese and U.S. officials, the
dollar was quoted at 134.29 yen at 0930 GMT (3.30 p.m. Jakarta
time), higher than 133.86 yen late Tuesday in New York. But the
dollar - which, some dealers believe, is due for a downward
correction - is below its new 39-month high of 134.46 yen reached
Tuesday.
Traders interpreted comments from U.S. Treasury Secretary Paul
O'Neill as a sign Washington wouldn't stand in the way of the
overall market trend, despite its annoyance with the idea of
artificially inducing a weaker yen.
O'Neill again blasted Wednesday any artificial weakening of
the yen as being a protectionist measure, which will only serve
to weaken the economy, rather than solve Japan's problems. But he
stopped short of complaining about currency levels per se - this
kept the dollar buoyed.
Pressure on the New Taiwan dollar from the weaker yen eased as
local exporters sold dollars when it traded around NTS35.10 and
on moderate intervention by Taiwan's central bank, dealers said.
The U.S. dollar ended at NT$35.082, slightly higher than
NT$35.061 Tuesday, but off an intraday high of NT$35.110.
The Thai baht received a double whammy from the tottering yen
and the Thai central bank's surprise decision to trim its policy
signal interest rate by 25 basis points late Tuesday to 2
percent, dealers said.
The Thai currency slipped to as low as 44.25 baht to the
dollar, compared with 44.135 baht late Tuesday. Late Wednesday,
the baht was quoted at 44.225 baht.
On the Philippine Dealing System, the weaker yen and
diminishing remittance inflows from overseas Filipino workers
weighed on the peso, dealers said.
The dollar closed at 51.360 pesos on the Philippine Dealing
System, up from 51.280 pesos Tuesday.
The Singapore dollar was firmer at S$1.8382 against its U.S.
counterpart on long U.S.-dollar liquidation, compared with
S$1.8394 late Tuesday.
The Indonesian currency was steady at Rp 10,400 to the dollar,
compared with Rp 10,390 late Tuesday.