Yen pulls won up; Southeast Asian monies down

Yen pulls won up; Southeast Asian monies down

HONG KONG (Dow Jones): Asian currencies had a mixed day
against the dollar Monday. While the Korean won was tugged higher
by an abrupt run-up in the value of the Japanese currency during
Asian trading hours, the yen's surge failed to support Southeast
Asian currencies, which finished the day down.

The won shrugged off a 5 percent decline in Korea's benchmark
Kospi equity index. It climbed partly in response to sales of the
dollar by local exporters anxious to repatriate foreign currency
revenues before the end of the month.

In heavy trading the U.S. currency was sold down to an
intraday low of 1,128.10 won before it bounced to end the session
at 1,134.30 won. At Friday's close the dollar was at 1,136.60
won.

Despite Monday's gains, analysts remained cautious on the
short-term outlook for the Korean currency.

"It's hard to say buy now," said Chia Hsin-Li, foreign
exchange strategist at J.P. Morgan in Singapore.

Although the Korean currency retains its long-term positive
outlook, swings in the value of the yen represent a "wild card"
in the short term, she explained, saying that any further
weakness in the yen would put pressure on the won.

Although the dollar nose-dived in Asia Monday, the U.S.
currency is still trending upwards against the yen after finding
support above Y108, according to technical analysts at Standard
Chartered Bank.

Southeast Asian currencies remained weak, despite the strength
of the yen.

The softness in regional currencies reflected the disillusion
of investors who bought into Asian markets late in 1999 and
earlier this year in expectation of a fundamentally-driven bull
run, only to see Asian currencies trail the yen lower.

"On a three- to six-month view, I still see the regional
currencies going higher," said David Simmonds, Asian foreign
exchange strategist at Citibank in Singapore.

Simmonds echoed the belief of most analysts that strong
economic growth and sizable current account surpluses will push
Asian currencies in the long term.

But in the short run he remained wary.

"On a one- to three-month view I think we are going to see a
strong dollar internationally," he said.

That strength in the U.S. dollar is helping to temper demand
for Asian currencies. Despite an economic performance strong
enough to allow the government to present a surplus budget
Friday, the Singapore dollar slipped Monday.

But with no significant inflation evident in Singapore and the
island under competitive pressure to keep business costs down,
there is little chance the local monetary authority will allow
the Singapore dollar to strengthen just yet.

Late in Asia Monday, the U.S. dollar was quoted against the
Singapore currency at S$1.7095, down a fraction from S$1.7099
late Friday.

Against the Indonesian rupiah the dollar was at Rp 7,450,
compared with Rp 7,455 late Friday.

The Thai baht also struggled Monday, after central bank
Governor Chatu Mongol Sonakul expressed fears that the baht's
strength relative to other regional currencies may be undermining
Thailand's export competitiveness.

Late in Asia the dollar was quoted against the baht at 37.895
baht, down slightly from 37.980 baht towards the end of Friday's
trading.

On the Philippine Dealing System, the dollar ended at 40.950
pesos, up from 40.870 pesos at the previous close.