* Asia FX mostly lower after previous day's rally vs dollar
* Focus on duration of U.S. government shutdown
* Baht leads drop, pressured by gold's fall overnight
* Taiwan dollar bucks trend, holds firm
By Masayuki Kitano
SINGAPORE, Oct 2 (Reuters) - Asian currencies were mostly
lower on Wednesday, taking a breather after having rallied
against the dollar the previous day when the U.S. government
began a partial shutdown.
Emerging Asian currencies had climbed broadly versus the
greenback on Tuesday, partly on speculation that the U.S.
government shutdown may lessen the chances of the Federal
Reserve scaling back its monetary stimulus very soon.
The drop in the greenback and the rally in Asian currencies
lost steam, however, amid uncertainty over whether the U.S.
government shutdown would prove short-lived or drag on.
"That's the big debate ... how long the shutdown persists,"
said Sim Moh Siong, FX strategist for Bank of Singapore.
"I think the market overall is perhaps a bit hopeful that
the shutdown could be quite brief," Sim said, adding that there
were also hopes that an agreement on the U.S. debt ceiling would
be reached as part of the ongoing negotiations.
The Thai baht led the drop in Asian currencies,
coming under pressure after the previous day's sharp slide in
gold prices triggered demand for the dollar.
The precious metal is popular among Thai investors, and
falls in gold prices often prompt some to buy physical gold or
futures. In turn, they need dollars to make such purchases.
While most emerging Asian currencies retreated, the Taiwan
dollar bucked the trend and edged higher, with traders saying
some overseas players were still selling the dollar because of
the U.S. government's partial shutdown.
The Indonesian rupiah retreated due to corporate
demand for the dollar, traders said. A Jakarta-based trader said
the dollar buying was by local importers.
The rupiah, which had rallied on Tuesday after Indonesia
reported a surprise trade surplus in August, fell 0.4 percent to
11,555 versus the dollar.
The rupiah had set a 4-1/2 year low versus the dollar of
11,660 on Monday, according to Thomson Reuters data.
SOUTH KOREAN WON
The South Korean won was little changed versus the dollar at
Market participants said they expected it would be difficult
for the won to rise above the 1,070 level in the near term due
to the threat of intervention to curb the won's recent gains.
South Korea's finance ministry has recently warned it is
watching markets closely for volatility in the won against the
CURRENCIES VS U.S. DOLLAR
* Chinese markets are closed from Oct. 1 through Oct.7 for
the National Day holiday.
* Indian markets are closed on Wednesday for a holiday.
Change on the day at 0606 GMT
Currency Latest bid Previous day Pct Move
Japan yen 97.67 98.01 +0.35
Sing dlr 1.2531 1.2518 -0.10
Taiwan dlr 29.490 29.615 +0.42
Korean won 1073.85 1073.50 -0.03
Baht 31.30 31.13 -0.54
Peso 43.40 43.33 -0.17
Rupiah 11555.00 11515.00 -0.35
Rupee 62.46 62.46 +0.00
Ringgit 3.2340 3.2345 +0.02
Yuan 6.1220 6.1220 +0.00
Change so far in 2013
Currency Latest bid End prev year Pct Move
Japan yen 97.67 86.79 -11.14
Sing dlr 1.2531 1.2219 -2.49
Taiwan dlr 29.490 29.136 -1.20
Korean won 1073.85 1070.60 -0.30
Baht 31.30 30.61 -2.20
Peso 43.40 41.05 -5.41
Rupiah 11555.00 9630.00 -16.66
Rupee 62.46 54.99 -11.96
Ringgit 3.2340 3.0580 -5.44
Yuan 6.1220 6.2303 +1.77
(Additional reporting by Emily Chan in TAIPEI, Christine Kim in
SEOUL; Editing by Chris Gallagher)