SINGAPORE: The Indonesia rupiah led gains among emerging Asian currencies on Monday, hitting a three-week peak on higher stocks and bond prices as hopes over the new president's economic reforms grew.
Emerging Asian currencies rose as solid US data and corporate earnings calmed concerns over a global economic slowdown. Regional equity markets also rallied.
The rupiah gained as much as 0.9 percent to 11,994 per dollar, its strongest since Sept. 26. Jakarta shares advanced 1.2 percent. Government bond yields slumped with the 10-year yield down to 8.101 percent, its lowest since Sept. 9.
Reform-minded Joko Widodo earlier in the day took over as president of Southeast Asia's top economy.
"Foreign and local banks sold dollar/rupiah on today's big event, Jokowi's inauguration," said a Jakarta-based currency trader referring to Widodo.
Last week, the rupiah was the best-performing emerging Asian currency with a 0.9 percent gain against the dollar, according to Thomson Reuters data.
A Widodo adviser told Reuters last week the new government planned to order the steepest fuel price increase in nine years "within the first two weeks of taking office."
Still, the new president may struggle to find support from parliament as a stiff opposition coalition could hurt his ability to carry out reforms, analysts said.
"The road ahead will not be smooth for Jokowi and markets seem to have been reminded of this in the past month or so," DBS said in a client note.
"A fragmented parliament may remain a hurdle for the new government."
Foreigners sold a combined net 6.1 trillion rupiah ($507.70 million) worth of Jakarta stocks in the first 17 days of October, according to Thomson Reuters data. In bond markets, they cut government debt holdings to 440.82 trillion rupiah as of Oct. 15 from end of September, the government data showed.
WON
The won gained as Seoul shares jumped 1.5 percent with foreign investors' net buying for the first time this month.
Offshore funds also bought the won, traders said.
Caution grew over possible intervention by the foreign exchange authorities to stem the won's appreciation as it touched its strongest in more than a week against the yen .
The won gained as much as 0.8 percent to 9.8603 to the Japanese currency, its strongest since Oct. 10.
"The yen/won exchange rate could limit the won's strength (against the dollar)," said a foreign bank trader in Seoul.
"Higher stocks looked to have been priced in to some degree. I don't expect the won to rise much further."
South Korea's President Park Geun-hye and other senior officials have expressed concerns over the won's strength against the yen as the country competes against Japan in overseas exports markets.
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