SINGAPORE: Most emerging Asian currencies rose with the South Korean won hovering near 17-month high on Wednesday as China's strong yuan fixing indicated a recovery there, and on expectations of more stimulus from Japan.
Domestic exporters powered the won, the Taiwan dollar and the Malaysian ringgit. The Singapore dollar advanced on demand from leveraged funds.
But the Indonesian rupiah fell again on local corporate dollar demand and as some foreign investors sold domestic bonds, dealers said.
China's yuan stayed around its all-time high as the central bank signalled it may allow further appreciation, fixing the yuan's midpoint firmer.
"The strong fixing showed China is confident enough to tolerate a strong currency. That is good for Asia," said Jeong My-young, Samsung Futures' research head in Seoul.
"Investors will push emerging Asian currencies higher, given China's stance on the currency, although other regional authorities will step in to slow down their currency's appreciation," Jeong added.
Emerging Asian currencies and economies heavily rely on the health of China. Recently, the economy showed signs of stabilising, on with the fourth quarter growth seen rebounding.
Most regional units resumed gains against the yen as sources said the Bank of Japan will consider easing monetary policy again this month and it eyes doubling its inflation target to 2 percent.
Still, some foreign exchange authorities in Asia such as South Korea and Philippine did not allow quick appreciation in their currencies with actual dollar-buying intervention, dealers said.
WON
The won hit 1,161.0 per dollar, a notch weaker than a 17-month high of 1,060.4 touched on Monday. Domestic exporters, offshore funds and custodian banks chased the South Korean currency.
But the foreign exchange authorities were spotted intervening to prevent it from ending firmer than the session high, dealers said.
TAIWAN DOLLAR
The Taiwan dollar advanced on exporter demand for settlements, while foreign financial institutions sold the island's currency, dealers said.
Interbank speculators hesitated to build up positions either way amid lower trading volume.
SINGAPORE DOLLAR
The Singapore dollar slightly gained on demand from leveraged funds and as some investors bought the city-state's currency against the ringgit on dips.
Still, model accounts and short-term speculators sold the Singapore dollar, limiting its upside, dealers said.
RINGGIT
The ringgit advanced as local oil exporters and interbank speculators bought the currency. Offshore investors also showed interest in the Malaysian currency, dealers said. But some investors took profits from the ringgit against the Singapore dollar.
RUPIAH
The rupiah's indicative prices slid 0.7 percent to 9,730 per dollar but its real prices were softer with 9,830-9,850 traded, dealers said.
Dollar demand from local importers and offshore funds put pressure on the rupiah, while some foreign banks sold Indonesia's bonds, dealers said.
A Jakarta-based currency dealer said those foreign banks looked to sell them before the government bond sales on Jan. 15 to replace their existing bonds with new ones.
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