EM ASIA FX-Asian currencies rise broadly on U.S. shutdown

Reuters

* Asia FX up on worries of protracted U.S. govt shutdown

* Ringgit leads gains; dollar falls broadly

* Peso extends gains after Moody's upgrades Philippines

By Masayuki Kitano

SINGAPORE, Oct 3 (Reuters) - Asian currencies rose on

Thursday as the dollar retreated due to worries that the U.S.

government's partial shutdown could drag on, with the peso

getting an added lift after Moody's upgraded the Philippines.

The peso extended its gains versus the dollar after Moody's

Investors Service upgraded the Philippines to an

investment-grade Baa3 from Ba1 and assigned a positive outlook.

The Philippines had already won investment-grade ratings

from two other leading agencies this year. Fitch Ratings

delivered the first, in March, with Standard & Poor's following

after five weeks.

"It pushed the dollar/peso to break below the 43.20-25

support level, which was previously a very strong (dollar)

support," said a trader for a bank in the Philippines.

The peso last stood at 43.13 to the dollar, up

about 0.6 percent on the day.

"I think the move lower in the dollar against the peso will

be limited," said Sean Yokota, head of Asia strategy for

Scandinavian bank SEB in Singapore. Yokota added that this being

the third rating agency to upgrade Philippines to investment

grade it should be priced in.

Emerging Asian currencies rallied broadly, led by gains in

the Malaysian ringgit. The Singapore dollar

underperformed its peers and was flat on the day.

"U.S. dollar selling across the board. Everybody is

selling...or rather nobody wants to be long," said a trader for

a Malaysian bank in Kuala Lumpur.

Speculation that the U.S. government shutdown could prolong

and lessen the chances of the Federal Reserve tapering its

monetary stimulus in the near term has helped support Asian

currencies against the dollar in the past few days.

"If the shutdown stretches into weeks, there will be a drag

on growth," said Andy Ji, Asian currency strategist for

Commonwealth Bank of Australia in Singapore.

"With the dollar index trading close to its levels at

end-2012, it appears the market is pricing in even a slight

chance of no-tapering this year, which is probably too dovish,

but possible."

TAIWAN DOLLAR

The Taiwan dollar touched a near five-month high of

29.403 versus the U.S. dollar.

Traders said inflows from overseas investors helped lift the

Taiwan dollar, while flows from local exporters were relatively

thin.

The following table shows the position of Asian currencies

against the dollar at 0455 GMT.

CURRENCIES VS U.S. DOLLAR

*South Korean markets are closed for a holiday.

*Chinese markets are closed from Oct. 1 through Oct. 7 for

the National Day holiday.

Change on the day at 0455 GMT

Currency Latest bid Previous day Pct Move

Japan yen 97.68 97.36 -0.33

Sing dlr 1.2486 1.2484 -0.02

Taiwan dlr 29.407 29.610 +0.69

Korean won 1074.02 1074.00 -0.00

Baht 31.17 31.32 +0.48

Peso 43.13 43.40 +0.63

Rupiah 11525.00 11555.00 +0.26

Rupee 61.90 62.46 +0.91

Ringgit 3.1920 3.2270 +1.10

Yuan 6.1220 6.1220 +0.00

Change so far in 2013

Currency Latest bid End prev year Pct Move

Japan yen 97.68 86.79 -11.15

Sing dlr 1.2486 1.2219 -2.14

Taiwan dlr 29.407 29.136 -0.92

Korean won 1074.02 1070.60 -0.32

Baht 31.17 30.61 -1.80

Peso 43.13 41.05 -4.82

Rupiah 11525.00 9630.00 -16.44

Rupee 61.90 54.99 -11.16

Ringgit 3.1920 3.0580 -4.20

Yuan 6.1220 6.2303 +1.77

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(Additional reporting by Jeanny Kao in TAIPEI; Editing by

Prateek Chatterjee)

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