SE Asian currencies fall in line with Japanese yen

SE Asian currencies fall in line with Japanese yen

SINGAPORE (Dow Jones): Southeast Asian currencies are lower
against the U.S. dollar late yesterday, in line with losses
posted by the Japanese yen.

The one exception to the rule is the thinly traded Indonesian
rupiah, which managed to gain nearly 2 percent on the day after
two protest demonstrations remained peaceful.

Followers of the Indonesian Democratic Party's (PDI) ousted
leader, Megawati Soekarnoputri, held peaceful rallies to
commemorate the riots of July 27, 1996, which were sparked when
government-backed opponents of Megawati in the PDI forcibly
evicted her supporters from party headquarters in Jakarta. Relief
at the peaceful conclusion of the rallies helped boost the
rupiah.

"There was some apprehension in the morning, but nothing came
of that," said Paul Alapat, senior economist with Indosuez WI
Carr in Singapore. "The focus in Indonesia has now shifted to
talks on Thursday and Friday between donor countries."

Members of the Consultative Group on Indonesia, a grouping of
countries that lend money to the country, are meeting in Paris
this week and are expected to increase significantly the amount
of loans they provide to Indonesia this year from US$5.3 billion
last year.

In a late trading, the U.S. dollar is quoted at 13,850 rupiah,
down from 14,100 rupiah late Friday.

Aside from Indonesia, analysts say the focus for the rest of
the regional currency markets remains on Japan.

"Until we have some clarity on Japan, it will pretty much
overshadow any country-specific issues," said Indosuez WI Carr's
Alapat.

The dollar rose against the yen Monday on the back of
lingering worries over whether premier-in-waiting Keizo Obuchi -
elected president of Japan's ruling Liberal Democratic Party on
Friday and sure to become the next prime minister - will be able
to pull Japan out of its economic doldrums.

Market talk that Obuchi may be struggling to find a finance
minister for his new cabinet added to yen bearishness, dealers
said.

"Japan is one of the region's largest export markets, so if
the yen falls, the regional currencies will fall, as well," said
Marshall Mays, chief strategist with Nikko Securities in
Singapore.

However, Mays noted that regional currencies generally should
not mirror the magnitude of the yen's losses.

"It is not a one-to-one relationship," said Mays. "It is more
like a two-to-one relationship, roughly."

He added that the large losses racked up by Southeast Asian
currencies since June were more in response to the speed of the
depreciation of the yen, rather than the simple fact that it was
falling against the dollar.

The Singapore dollar led the regional charge down the yen's
path Monday, posting bigger losses than any other currency.

In a late trading, the U.S. dollar is quoted was S$1.7243, up
from S$1.7099 late Friday.

A dealer at a Hong Kong-based bank in Singapore said there was
much talk in the market about cross plays against other regional
currencies, at the expense of the Singapore dollar.

The intraday charts certainly bear that out," said the trader.
"The ringgit and the baht both came off intraday lows late in the
day, and the rupiah actually appreciated."

In a late trading, the dollar is quoted at 41.2050 baht, up
from 40.8050 baht Friday.

Against the ringgit, the U.S. dollar is quoted at 4.1502
ringgit, up from 4.1350 ringgit late Friday.

On the Philippine Dealing System, the U.S. dollar ended at
42.180 pesos, up from 42.110 pesos on Friday.

Meanwhile, in Northeast Asia, the South Korean won rose to a
new high for the year against the U.S. dollar.

The dollar ended the day at 1,209 won, sharply lower than
Friday's close of 1,245 won.

Traders in Seoul said that - in addition to the normal,
end-of-month dollar sales by exporters repatriating foreign
earnings - foreigners have continued to exchange dollars for won
to buy local assets as they expand into South Korea, which has
opened its doors to more foreign investment in the wake of the
financial crisis there.

Abiding by the reform program agreed upon with the
International Monetary Fund late last year as part of a US$58.35
billion bailout fund, South Korea has opened its stock, bond and
real estate markets to foreign investors.

The U.S. dollar continued its gains against the New Taiwan
dollar, despite central bank intervention in the currency market
to the tune of US$50 million to US$60 million throughout the day,
according to traders in Taipei.

The U.S. currency's advance has been aided by yen weakness and
strong corporate demand locally for the U.S. currency, traders
said.

The U.S. dollar ended at NT$34.409, up from NT$34.361 on
Friday.