Asian currencies: rupiah and peso recover after

The Indonesian rupiah and Philippine peso rose on Thursday after a sell-off the previous session, tracking volatility in the US Treasury market, where yields retreated as appetite for risk improved.
Most Asian currencies were supported by rising regional stocks and a stronger Chinese yuan, but they failed to make much headway amid lingering caution over rising global interest rates.
"Despite the overnight easing in US Treasury yields, risk appetite remains uncertain and the dollar/Asia conditions are likely to remain choppy," analysts at J.P. Morgan said in a note. The yield on benchmark 10-year Treasuries was around 5.22 percent on Thursday, down from a five-year peak of more than 5.3 percent on Wednesday.
The high-yielding rupiah hovered near 9,060 per dollar, up about a third of a percent from late Asian trade on Wednesday, after rising as far as 9,015 in early trade. The peso, another high-yielder in Asia, gave up most of gains made in early trade and steadied near 46.66 per dollar after briefly hitting 46.40.
"At the moment, there seems no fundamental factors affecting the rupiah's choppiness. It looks like it might stay in the range between 8,950 and 9,150 for some time," a trader in Jakarta said. The Malaysian ringgit gave up some gains made in early trade, still rising a tenth of a percent to 3.465 per dollar.
"Dollar buying is seen around 3.44, and selling should be seen around 3.47 all the way to 3.48," said a dealer in Kuala Lumpur. "In the long term, the factors for a stronger ringgit are still there, but we are seeing some short-covering taking place in the short term," he said.
The rupiah, peso and ringgit have been hit hard in recent sessions by a surge in US Treasury yields amid fears that global interest rates will rise, which lured investors away from riskier investments.
The dollar hit a 4-1/2-year high against the yen, extending gains after strong US retail sales data the previous session reinforced expectations that the Federal Reserve would not cut interest rates this year. But many analysts see the dollar's rally against Asian currencies as short-lived, given the region's solid economic fundamentals that make them attractive to foreign capital.
"I expect the current consolidation to give way ultimately to further carry trade out-performance. Many regional central banks in Asia have an inflation problem, which will need to be addressed," said Sue Trinh, currency strategist at RBC Capital Markets.
Reflecting improved sentiment, the MSCI's index of regional shares outside Japan rose more than 1.7 percent. The Indian rupee, Asia's best-performing currency which has strengthened 8.4 percent versus the dollar so far this year, gained almost 0.3 percent to 40.85 per dollar.