EM ASIA FX-Asian currencies slip on U.S. debt ceiling jitters

Reuters

* Asia FX mostly weaker, rupee and ringgit lead losses

* Muted reaction to news Yellen to be tapped for Fed chair

* U.S. debt ceiling worries cast cloud over risk sentiment

(Adds text, updates prices)

By Masayuki Kitano

SINGAPORE, Oct 9 (Reuters) - Asian currencies edged lower on

Wednesday, hampered by uncertainty over whether the White House

and U.S. lawmakers will agree to raise the country's debt

ceiling in time to avert the risk of a U.S. default.

While markets expect that a deal will be struck eventually,

nervousness is growing ahead of an Oct. 17 deadline identified

by U.S. Treasury Secretary Jack Lew for raising the country's

$16.7 trillion borrowing limit.

Emerging Asian currencies fell broadly, with losses led by

the Indian rupee and the Malaysian ringgit.

"The U.S. politicians are as further away from each other as

they've been in a while," said Jonathan Cavenagh, a

Singapore-based foreign exchange strategist for Westpac Banking

Corporation.

There seems to be a fair degree of nervousness in the

market, judging from moves such as a jump in the CBOE Volatility

Index and a spike in U.S. Treasury bill yields

, Cavenagh said.

Asian currencies showed limited reaction to news that

President Barack Obama will nominate Federal Reserve Vice Chair

Janet Yellen to be the next head of the U.S. central bank on

Wednesday.

The decision to tap Yellen, who has been a forceful advocate

of the aggressive action taken under current chairman Ben

Bernanke to stimulate growth, came as little surprise to the

market, analysts said.

"I guess at this point, it wasn't that much of a surprise

any more that Obama nominated her," said a trader for a bank in

the Philippines, adding that while the dollar initially dipped

against Asian currencies on the news, the impact proved

short-lived.

MALAYSIAN RINGGIT

At current levels, the ringgit had logged the second-biggest

percentage loss on the day among emerging Asian currencies

behind the Indian rupee.

The ringgit fell 0.3 percent, while the rupee was

down 0.5 percent.

The ringgit seems to be increasingly becoming a regional

barometer of investors' risk appetite, said Westpac's Cavenagh.

"It seems to me to be taking over the old job that

dollar/Korea used to have," Cavenagh said, adding that this may

be partly due to the fact that foreign ownership in Malaysia's

government bond market has been very high.

"So it's a pretty good proxy for some of these concerns that

people have for the region," he said.

CURRENCIES VS U.S. DOLLAR

Change on the day at 0553 GMT

Currency Latest bid Previous day Pct Move

Japan yen 97.41 96.87 -0.55

Sing dlr 1.2512 1.2498 -0.11

Taiwan dlr 29.433 29.542 +0.37

Korean won 1074.25 1073.70 -0.05

Baht 31.40 31.35 -0.16

Peso 43.15 43.08 -0.16

Rupiah 11533.00 11525.00 -0.07

Rupee 62.10 61.79 -0.50

Ringgit 3.2050 3.1955 -0.30

Yuan 6.1192 6.1211 +0.03

Change so far in 2013

Currency Latest bid End prev year Pct Move

Japan yen 97.41 86.79 -10.90

Sing dlr 1.2512 1.2219 -2.34

Taiwan dlr 29.433 29.136 -1.01

Korean won 1074.25 1070.60 -0.34

Baht 31.40 30.61 -2.52

Peso 43.15 41.05 -4.87

Rupiah 11533.00 9630.00 -16.50

Rupee 62.10 54.99 -11.45

Ringgit 3.2050 3.0580 -4.59

Yuan 6.1192 6.2303 +1.82

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(Editing by Chris Gallagher)

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