Most Asian currencies showed resilience on Monday as Japanese companies appeared to hold off from quickly repatriating large sums in the wake of the country's deadly earthquake and tsunami. Among currencies that weakened, the biggest move was by the South Korean won, which hit a 2-1/2 month low on dollar short-covering.
A Japanese bank dealer in Taipei said there were some outflows to Japan but the volume was not big. The Taiwan dollar strengthened against the US dollar because of exporters' demand for settlements.
The Indonesian rupiah hit a four-year high against the dollar on Monday as there was no sign of a big pullout by Japanese corporates and investors. Since February, the rupiah is the best performer against the dollar among emerging Asian currencies, gaining 3.2 percent against the greenback. Indonesia's chief economics minister also said the government expects Japan investment to the country to continue.
Authorities in the region are also expected to cap falls in their currencies in a bid to fight inflation, they added. The won weakened past this year's low against the dollar as market players including foreign model funds covered dollar-short positions and on dollar-demand linked to foreign investors' recent stock sales.
The country's interest rate swaps eased on expectations the central bank will not tighten monetary policy immediately amid growth concerns and on easing inflationary pressures. The won lost as much as 1 percent to 1,135.3, the lowest since December 30. The Singapore dollar weakened as the Monetary Authorities of Singapore (MAS) was seen buying US dollar cemented caution over its determination to cap the local currency's strength.
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