Asian monies unfazed by BOJ move

Asian monies unfazed by BOJ move

HONG KONG (Dow Jones): The Bank of Japan's intervention to weaken the yen barely caused a stir in Asia's regional foreign exchange markets Monday, as most other Asian currencies tracked sideways or trended only moderately lower.

The sole exception was the Philippine peso, which sank back as market players trimmed their long positions in the currency in response to the peso's shrinking yield spread over the U.S. dollar.

The yield on the Philippines' benchmark treasury bill dropped Monday to its lowest level in over 12 years, falling to 8.474 percent, down steeply from 13.459 percent at the beginning of the year.

The BOJ's intervention will also weigh on the peso in the short term, as will the fear that the Central Bank of the Philippines could enter the market itself should the local currency appreciate rapidly, said David Simmonds, Asian currency strategist at Citibank in Singapore.

By the end of local trading Monday, short covering had pushed the U.S. dollar up to finish the day at 38.145 peso, up from 38.073 peso at Friday's close.

Elsewhere in the region, the Indonesian rupiah ended Asian trading hours higher against the U.S. currency, although traders were reluctant to read too much significance into the move.

"I'm not that bullish on the rupiah," said one Singapore-based trader at a U.S. bank.

With so much uncertainty still surrounding future political developments, hot money, which has recently flowed into Jakarta, could just as rapidly flow out again, he warned.

Although the proposed rescheduling of US$2.6 billion of Indonesia's sovereign debt is broadly positive for the rupiah, profit-taking and a sell-off in the local stock market limited the local currency's gains Monday.

Toward the end of Asian trading hours, the U.S. currency was quoted at Rp 6,275, down from Rp 6,795 late Friday.

With markets still nervous about the delay in counting last month's election votes, profit-taking is likely to support the U.S. dollar at around Rp 6,600 in the short to medium term, potentially driving the U.S. currency as high as Rp 7,100 before fresh dollar sales emerge.

Both the Thai baht and the Singapore dollar remained range- bound Monday, as dealers bemoaned the lack of market volatility.

Baht traders said that strong U.S. dollar bidding interest was supporting the U.S. currency at 36.80 baht, while offers from Thai banks capped the market at 36.95 baht.

Late in Asian hours Monday, the U.S. dollar was at 36.8850 baht, up a fraction from 36.8700 baht late Friday.

Against the Singapore dollar, the U.S. currency was barely changed late Monday, ending Asian trading hours at S$1.6990, compared with S$1.6995 late Friday.

In North Asia, the South Korean won ended higher despite what one trader said was "continued and aggressive intervention" by the authorities to suppress the local currency.

At the close of trading in Seoul, the U.S. dollar was quoted at 1,162.90 won, down from 1,164.50 won at the end of Friday's session.

With attention focused on South Korea's stock market, which rose by more than 3 percent Monday, foreign investors are likely to keep on buying won in order to fund investments in the country's equities, regardless of government intervention, traders said.

Against the New Taiwan dollar, the U.S. currency ended at NT$32.296, up from NT$32.282 at the end of Saturday's abbreviated trading session, but little different from NT$32.291 at Friday's close.