Asian currencies mostly firm

Most Asian currencies rose on Thursday, led by a rebound in the Indonesian rupiah and Philippine peso as rising global stocks eased concerns about the broader fallout from the troubled US subprime mortgage market.
The high-yielding rupiah jumped as far as 9,040 per dollar, up nearly 0.8 percent from late Asia trade on Wednesday, while the peso another high-yielder, rose more than 0.6 percent to 46.28 per dollar.
The rupiah, which is down 0.9 percent versus the dollar so far this year, remains one of the worst performing currencies in Asia amid concerns that Indonesian rates are falling when global interest rates are on the way up.
But the peso has been resilient - it remains the second-best performer in Asia with rises of 5.8 percent against the dollar so far this year, trailing only after the Indian rupee. Investors are awaiting fresh policy signals from the US Federal Reserve, which is due to end its two-day policy meeting.
"The Fed statement after the policy meeting will basically set the direction for tomorrow, I don't think any big positions will be done before tonight," said a trader in Manila.
The Fed is widely expected to keep its funds rate steady at 5.25 percent, but markets wait for its statement for the latest readout on the central bank's views on inflation and growth.
A shift in market expectations from a Fed rate cut as early as this year to no action or even a rate rise was part of several factors which dampened interest in high-yielding currencies.
The Japanese yen interrupted a three-day rally on Thursday as a rebound in US stocks eased concerns about a fallout from US subprime mortgage sector problems, prompting investors to sell yen again in carry trades. Reflecting improved investor sentiment, the MSCI index of Asian stocks outside Japan rose nearly 1.2 percent, taking their cue from rising US stocks.
Some analysts expect steep falls in the high-yielders in recent weeks to create buying opportunities for investors. "Our case has been that underlying flows into Asia will remain strong despite these concerns," Shahab Jalinoos, currency strategist at ABN AMRO, said in a research note.
"We had recommended going short dollar versus rupiah above 9,080, ringgit above 3.4700, peso above 46.50 and rupee above 41.00." The rupee gained as far as 40.80 per dollar while the Malaysian ringgit edged up from a 14-week low hit on Wednesday, strengthening as far as 3.4615 per dollar.
Thio Chin Loo, currency strategist at BNP Paribas, said she favoured the South Korean won and the ringgit. "We are bullish on Korean stocks that have positive implications for the won, despite being expensive on a trade-weighted basis. We are positive on the MYR too and like selling dollar/ringgit on rallies to 3.50," she said.