Most Asian currencies lower on yen, politics

Most Asian currencies lower on yen, politics

HONG KONG (Dow Jones): Asian currency traders had one eye on a
shaky Japanese yen and the other on the Indonesian rupiah and
regional politics as most major currencies lost ground Tuesday,
albeit in trading ranges.

In Japan, the yen is falling victim to the view that last
Friday's rate hike, and end to the Bank of Japan's zero-rate
policy, was purely an effort at asserting its independence and
wasn't economically sound. With that in mind, the U.S. dollar
rose to 109.32 yen by the late session, from 108.70 yen in late
Asian trading Monday. That's down from 109.47 yen late in New
York, but dealers say a move above the 110.00 yen level is in the
works soon.

In Southeast Asia, the rupiah itself held its own against
losses in the yen - and associated selling of the Philippine
peso, Thai baht and Singapore dollar - even as skepticism grew
about the Indonesian political situation. Some analysts said that
suggests investors are still keen to buy the currency and are
only awaiting an opportunity.

But a trader with a large U.S. bank, echoing others, said the
U.S. dollar is well supported now at Rp 8,200. The rupiah will
have trouble breaking that level and resuming a month-long rally
until Indonesian President Abdurrahman Wahid's puts substance
behind his pledge to delegate more responsibility to Vice
President Megawati Sukarnoputri.

The U.S. currency was quoted at Rp 8,215 late in the day, down
from 8,230 late Monday.

At any rate, as market players grow fretful about the yen,
other Asian currencies came under modest selling pressure that
pushed them into the weak end of recent trading ranges. "Losses
on the yen have definitely hurt the Singapore dollar and Thai
baht today," said a dealer with another U.S. house.

Against the Thai baht, the U.S. dollar was quoted at 40.665
baht, up from 40.595 late Monday.

Regional concerns aside, the Thai currency is also coming
under the sway of election politics. "The mood in Thailand is
that politics could become more fractious and that will be Thai-
baht negative," said Banque Paribas Currency Strategist Thio Chin
Loo.

Dealers were unnerved Tuesday when the Thai Rak Thai party
fired up its election campaign with a vow to reverse all key
policies of the current Democrat-led government.

The dealer with the U.S. house said the U.S. dollar will stick
to a range of 40.5 baht and 41.5 baht.

In Singapore, the U.S. dollar was quoted around S$1.7187, up
from S$1.7131 late Monday. "A Hong Kong bank has been a
consistent buyer" of U.S. dollars, said the first dealer. Other
traders said early in the session that the U.S. dollar was
unlikely to break above S$1.7200 in the short term amid concerns
the Monetary Authority of Singapore might defend the local
currency.

Against the Philippine peso, the U.S. dollar held steady
through much of the session at around 44.88 pesos, but dipped
slightly late Tuesday to 44.875 pesos. An unresolved set of
political problems will keep the currency on the defensive,
however, said dealers.

The weakness in the yen also led the New Taiwan dollar lower
late in the day, with the U.S. dollar at NT$31.099, compared with
Monday's close of NT$31.085.