SE Asian monies mixed, Japan holiday damps market activity

SE Asian monies mixed, Japan holiday damps market activity

SINGAPORE (Dow Jones): A public holiday in Japan left
Southeast Asian currencies mixed against the U.S. dollar in quiet
trading late Monday. The Indonesia rupiah remained flat, the
Philippine peso and Thai baht managed to eke out small gains, and
the Singapore dollar languished.

The U.S. dollar ended the day at 8,900 rupiah, unchanged from
Friday. Traders bemoaned the fact that the market - anxious about
continuing civil unrest - is highly illiquid, with only the odd
corporate order finding its way to trading desks.

"Indonesia will need to see confirmed economic reform before
investor flows become apparent," said an economist in Singapore.

He noted that the recent closure of 38 domestic banks, while
welcomed, did little to buoy confidence. "Given that politics
will overshadow everything until late November (to be then
followed by not-insignificant Y2K problems), it will need to be a
domestically driven turn-around in the economy if this year is to
witness the bottom."

In North Asia, the Korean won and new Taiwan dollar fell as
the U.S. dollar moved sideways between 117 yen and 118 yen during
the Asian trading session.

Traders said the regional currencies were trading in a narrow
range because of a lack of fresh news or market indicators,
especially out of Japan. "The U.S. dollar is still seen as heavy
(against the yen) in the short term," said a currency strategist
at a European bank in Singapore. He added that any dollar-bearish
sentiment won't translate into a sharply stronger yen, given the
propensity of Japanese trusts and corporations to buy U.S.
dollars just below 117 yen.

Higher

In late trading, the U.S. dollar was trading at 117.37 yen, up
from 117.16 yen late Friday in New York, with a large dollar-buy
order late in the session pushing the dollar higher.

"A thin market is buying on dips so this range trading between
116.50 and 119 yen is likely to be with us until fiscal year-end
(March 31) in Japan," a trader at a U.S. investment bank in
Singapore said.

Traders and currency strategists expect choppy movement in the
U.S. dollar-yen to push regional currencies in similar fashion.

The U.S. dollar was trading at S$1.7277, up from $1.7232 late
Friday. Traders said the market had already discounted the poor
trade figures released over the weekend. Non-oil domestic
imports, a key economic barometer, fell 7 percent in February
from the year-earlier period. And January retail sales figures,
announced late Friday, were down 13 percent on the year.

The U.S. dollar was also trading at 37.48 baht, down a touch
from 37.4950 baht late Friday. Friday's auction of $6.1 billion
of assets of failed finance companies didn't meet expectations,
economists said, adding that it could have negative implications
for the baht.

Peso

On the Philippine Dealing System, the U.S. dollar was trading
at 38.715 pesos, down a touch from 38.75 pesos late Friday.

While most traders ascribe any peso movements to what happens
in the U.S. dollar versus the yen, treasury bill rates continue
to soften following the central bank's decision to lower
overnight borrowing and lending rates by 12.5 basis points to 12
percent and 14 percent, respectively - the sixth rate cut this
year. At Manila's government securities auction Monday, treasury-
bill yields fell to 11.917 percent from 12.171 percent, pre-Asian
economic crisis levels.

"That should weaken the peso over the next quarter unless
continued strong capital flows from foreign direct investment
keep the peso strong," said a non-deliverable forwards trader at
a U.S. bank Manila.

In North Asia, the U.S. dollar was trading at 1,222.5 won, up
from 1,220.80 won late Friday. The U.S. currency was also trading
at 33.106 New Taiwan dollars, up a touch from NT$33.096.