EM ASIA FX-Yen's retreat cuts Fed-rooted weekly Asia FX gains

Source : REUTERS
Last Updated: Fri, Sep 23, 2016 12:00 hrs

* Won leads weekly Asia FX appreciation * Philippine peso near 8-month low on stock outflows (Adds text, updates prices) By Jongwoo Cheon SINGAPORE, Sept 23 (Reuters) - Most emerging Asian currencies fell on Friday, tracking the yen's weakness, to pare some of their weekly gains stemming from the U.S. Federal Reserve's stance of gradual interest rate hikes. The Philippine peso slid to 47.99 per dollar, its weakest since Jan. 26, on sustained equity outflows. Malaysia's ringgit slumped with oil prices seeing correction after strong gains. The Japanese yen eased as Tokyo issued a fresh warning against the currency's gain, saying the authorities are ready to act against excessive appreciation. Investors also saw a technical resistance at the 100-yen per dollar level, taking some profits from the Japanese currency's weekly appreciation. Some investors cut holdings in emerging Asian currencies after their rallies in the previous session as the U.S. central bank projected a less aggressive rise in rates next year and in 2018, encouraging markets to seek higher returns in the region. "Asian bonds are quite attractive because central banks in this region are still easing. So, there will be a very large amount of investor interest in emerging Asian bonds," said Chang Wei-Liang, Mizuho Bank's FX strategist in Singapore. A central bank rate cut usually supports bond prices. "But in the currency space, people will be a bit more cautious." Chang added. "You have lower rates in emerging Asia and the Fed could be hiking rates by December. People will want to be looking at hedging currency-related risks." WON LEADS The won has risen 1.5 percent against the dollar so far this week, leading appreciation among regional currencies, as exporters' demand for settlements added to support and there was stop-loss dollar selling. Taiwan's dollar has gained 1.1 percent versus the greenback this week, thanks to foreign investors being net buyers of local equities during the past four sessions. The Thai baht has advanced 0.7 percent on inflows into stocks and bonds. The Singapore dollar has risen 0.8 percent so far this week, tracking strength in the yen and the yuan. Traders and analysts believe both of the currencies to be a part of the undisclosed currency basket used by the Monetary Authority of Singapore to manage monetary policy. The yuan has edged up for the week. Indonesia's rupiah was on track to post a 0.5 percent weekly gain as foreign investors increased bond holdings. Bank Indonesia on Thursday cut its benchmark interest rate for the fifth time this year to spur growth and indicated more easing may be ahead. The dovish stance lifted the government's bond prices. The ringgit has advanced 0.5 percent as higher crude prices eased concerns over Malaysia's oil and gas revenue. Bond prices also rose. The peso bucked the regional appreciation trend, heading for a fourth week of depreciation with a 0.4 percent loss so far. Foreign investors were set to become net sellers of Manila stocks for a sixth consecutive week. CURRENCIES VS U.S. DOLLAR Change on the day at 0605 GMT Currency Latest bid Previous day Pct Move Japan yen 100.89 100.75 -0.14 Sing dlr 1.3578 1.3565 -0.10 Taiwan dlr 31.350 31.400 +0.16 Korean won 1102.00 1103.30 +0.12 Baht 34.66 34.65 -0.03 Peso 47.990 47.830 -0.33 Rupiah 13090 13085 -0.04 Rupee 66.64 66.66 +0.04 Ringgit 4.1150 4.1060 -0.22 Yuan 6.6701 6.6666 -0.05 Change so far in 2016 Currency Latest bid End prev year Pct Move Japan yen 100.89 120.30 +19.24 Sing dlr 1.3578 1.4177 +4.41 Taiwan dlr 31.350 33.066 +5.47 Korean won 1102.00 1172.50 +6.40 Baht 34.66 36.00 +3.87 Peso 47.99 47.06 -1.94 Rupiah 13090 13785 +5.31 Rupee 66.64 66.15 -0.73 Ringgit 4.1150 4.2935 +4.34 Yuan 6.6701 6.4936 -2.65 (Reporting by Jongwoo Cheon; Editing by Richard Borsuk)