Southeast Asian currencies rise on back of robust yen

Southeast Asian currencies rise on back of robust yen

SINGAPORE (Dow Jones): Regional currencies across Asia gained
ground against the U.S. dollar during local trading hours on
Wednesday, supported by a stronger yen and generally bullish
stock market sentiment.

After opening on a soft tone following an overnight drop in
the yen, both Southeast Asian and North Asian currencies
recovered from early lows as the Japanese currency rallied.

Traders and investors alike moved in to bid up Asian
currencies in response to the market's growing conviction that
Japan will implement further fiscal stimulus measures later in
the year.

"We are seeing some inflows of funds from foreign investors,"
said the head trader at one Thai bank.

Towards the end of Asian trading, sales had pushed the U.S.
dollar to 37.4700 baht, down from 37.6150 baht at the same time
the day before.

The Singapore dollar also benefited from positive investor
sentiment, despite a moderate sell off in the local stock market.

"It looks like sentiment has changed. What we are seeing is a
sound rally in the Singapore dollar," said a trader at a local
bank, adding: "With no big sellers around, I think the currency
is going to get stronger."

In recent sessions market participants have held back from
buying the Singapore dollar for fear that the Monetary Authority
of Singapore would intervene to push the currency down, should it
strengthen too far on a trade-weighted basis.

But as the Singapore dollar's continuing bull-run has failed
to prompt MAS action, traders have become more confident about
the Singapore dollar's prospects.

"Everyone was expecting intervention. But I don't think the
MAS is likely to come in if the rest of the Asian regional
currencies are also getting stronger," said one trader.

Towards the end of Asian trading the U.S. dollar had been sold
down to S$1.6953, from S$1.6988 a day earlier.

Strong support for the U.S. dollar should emerge at levels
between S$1.6900 and S$1.6920, said traders. But if S$1.6900 is
broken, "We are on the way back to the S$1.56 level," according
to one bullish dealer. Others expect firm support at S$1.6550.

Against the Indonesian rupiah, the U.S. dollar dropped to Rp
8,548, down from Rp 8,603, as some dealers reported rupiah
purchases from offshore players in search of handsome double
digit yields.

In North Asia, a combination of the yen's rally, continued
investment inflows and month-end revenue repatriation by
exporters helped the South Korean won and the New Taiwan dollar
to maintain their firm tone, even though local stock markets
surrendered some recent gains.

The U.S. dollar fell as low as 1,177 won under the selling
pressure, before the state-run Export-Import Bank entered the
market buying dollars to support the U.S. currency.

At the close, the U.S. dollar finished at 1,179.60 won, down
from 1,182.90 won the previous day.

In Taipei, the New Taiwan dollar managed to inch marginally
higher, despite healthy local corporate demand for the U.S.
currency, which absorbed most of the available inflows.

At the close, the U.S. dollar was quoted at NT$32.681, down
just a fraction off NT$32.682 at Tuesday's close.

The Philippine peso, however, failed to keep pace with the
run-up in other regional currencies, despite a 1.6 percent rally
in the local stock market.

After dropping to an intraday low of 37.976 pesos, the U.S.
dollar recovered, to finish the day a touch higher on buying to
cover short positions, according to traders.

At the close of local trading, the U.S. dollar was at 38.030
pesos, up slightly from 38.010 pesos at the end of Tuesday's
session.