Most Asian monies ignore yen's stumble

Most Asian monies ignore yen's stumble

SINGAPORE (Dow Jones): Apart from the Singapore dollar and the
Thai baht, Asian currency markets seemed blissfully unaware that
the dollar has surged nearly two yen in the past 24 hours.
The South Korean won, the Indonesian rupiah, the Philippine peso,
and the New Taiwan dollar gained against the U.S. dollar late
Tuesday, underscoring the strength of the Asian recovery - with
or without Japan's help, dealers said.

"Asian currencies' link with the yen has become weaker over
time," said Marshall Gittler, head of Asian currency strategy at
Bank of America. "Asian economies are less dependent on Japan.
They can recover without Japan."

He said Asian countries are far more reliant on the U.S. as an
export market and even one another than on Japan.

The increasingly tenuous correlation between the yen and Asian
currencies is especially notable in the case of the won, since
50% of South Korea's exports overlap with that of Japan.

Although the U.S. dollar soared to Y109.29 late Tuesday from
Y107.55 late Monday in Tokyo, it has weakened against the won, to
1128.8 won late Tuesday, compared with 1129.2 won late Monday.

Indeed, the won has been moving on its own momentum, fueled by
a strong economic outlook and heavy investment inflows.

"The outlook for the Korean economy and stock market is pretty
good," Gittler said. "Even if the yen were to weaken further, the
won would still appreciate - maybe not as much, but it would
still appreciate."

He said yen weakness, if anything, will relieve pressure on
Korea's central bank to intervene to weaken its own currency.

Late Tuesday, the New Taiwan dollar also strengthened, to
NT$30.731 against the U.S. dollar from NT$30.755 late Monday.

Analysts said with a presidential election scheduled for next
month, the ruling party is likely to ensure the currency and
stock market stay firm.

Against the Indonesian rupiah, the dollar declined to 7,461
rupiah late Tuesday from Rp 7,495 late Monday.

David Simmonds, Asian currency strategist at Salomon Smith
Barney, said players are unwinding long U.S. dollar positions,
taking profits even as the standoff between Indonesia's President
Abdurrahman Wahid and Security Minister General Wiranto wears on.
"The bearishness is fully priced in," he said.

But analysts said that whatever the outcome, the chances of a
military coup - the worst possible scenario - now seem slim.

The U.S. dollar also slid against the Philippine peso, falling
to 40.498 pesos late Tuesday from 40.545 pesos late Monday.

Analysts said while benign inflation figures released Monday
may have helped, the peso is mostly playing catch-up with other
regional currencies after underperforming for the last several
months. Philippine data showed the consumer price index rose a
smaller-than-expected 2.6% in January from the year before, its
lowest inflation figure in 13 years.

While other Asian currencies failed to react to the U.S.
dollar rally against the yen, the Singapore dollar and the Thai
baht bore the brunt of the impact.

The U.S. dollar was quoted at S$1.6948 late Tuesday, compared
with S$1.6910 early Friday. Markets were closed late Friday and
Monday for the Lunar New Year holiday.

Against the Thai baht, the U.S. dollar was quoted at 37.625
baht late Tuesday, up from 37.55 baht late Monday.