EM ASIA FX-Hawkish Fed woes hurt Asia FX; politics drag baht lower

Reuters

* Baht down as Thai shares hits 1-mth low

* Rupiah lower on weaker stocks, bonds

* Some foreign banks buy Indonesia bonds for yields -traders

* Philippine peso falls on catch-up plays

(Adds text, updates prices)

By Jongwoo Cheon

SINGAPORE, Nov 4 (Reuters) - Most emerging Asian currencies

extended slides on Monday as investors added bearish bets on

growing expectations that the U.S. Federal Reserve may start to

scale back its stimulus this year after strong economic data.

A weaker euro also hurt emerging Asian currencies amid

increasing views that the European Central Bank will be forced

to cut interest rates to support growth. Regional currencies

failed to find support from strong Chinese service sector

activity data.

The Thai baht weakened on fears about heightening

opposition against a political amnesty bill.

The Indonesian rupiah slid on lower stocks and bond

prices, while the Philippine peso fell on catch-up

selling.

"You get a stronger USD this month since the October data,

which was expected to be weak from the U.S. (government)

shutdown. But it isn't having as much impact on the October

economic data," said Sean Yokota, head of Asia strategy at

Scandinavian bank SEB in Singapore.

Emerging Asian currencies are expected to retreat further,

Yokota added.

Last week, most regional units fell as solid U.S. data

revived expectations that the Fed might reduce its monthly

bond-buying programme starting in December, rather than in March

as many in the market currently anticipate.

The U.S. manufacturing sector expanded at its fastest pace

in more than two years in October, an industry report showed on

Friday, spurring views on the Fed's possible policy shift.

Still, some traders preferred a defensive stance ahead of

policy meetings of major central banks this week including the

ECB's gathering on Thursday. Investors are also awaiting

economic data such as U.S. October jobs data due on Friday.

"There is no reason for Asian currencies to be strong and

the market stays long dollar versus Asia," said a senior

Malaysian bank trader in Kuala Lumpur.

"But this week, we got a lot of big events, so market will

adjust positions."

BAHT

The baht fell as Bangkok shares hit a near one-month

low, underperforming peers in Southeast Asia, amid worries about

political tension.

"There is going to be a demonstration this afternoon in

central Bangkok, and there is some wariness about that," said a

trader for a Japanese bank in Singapore.

"I wonder whether this will be an issue that will last for a

while. Especially in the case of topics related to politics,

they often tend to simmer," he added.

Five-year bond yield rose to 3.63 percent, the

highest since Oct. 1.

Thousands of protesters took to the streets of the Thai

capital on Friday after lawmakers approved a draft political

amnesty bill that could allow the return of self-exiled former

premier Thaksin Shinawatra, one of Thailand's most polarising

figures.

RUPIAH

The rupiah fell as Indonesian stocks and bond prices

fell.

The 10-year bond yield rose to 7.853 percent

from Friday's 7.563 percent, while the five-year yield

advanced to 7.269 percent from 7.031 percent. The

three-year yield jumped to 7.106 percent from 6.647

percent.

The forward onshore market, or Jakarta Interbank Spot Dollar

Rate (JISDOR), was fixed at 11,389 per dollar,

compared with Friday's 11,354.

Some foreign banks, however, bought Indonesian bonds,

limiting the rupiah's downside, traders said.

"Offshore investors still demand higher yields," said a

Jakarta-based trader, adding the rupiah is seen finding support

around 11,400 per dollar.

PHILIPPINE PESO

The peso lost as much as 0.4 percent to 43.37 per dollar,

its weakest since Oct. 2.

Investors added dollar positions against the Philippine

currency. Local financial markets were closed on Friday when

most other emerging Asian currencies fell.

The peso found some relief with three- and five-year bond

yields lower, but traders looked to sell it on rallies.

"Buying dollar on dips is still preferred play on

dollar/peso, given that the downside remains well defended by

intervention," said a senior Philippine bank trader in Manila.

The peso may weaken to 43.50 per dollar in a near term and

eventually 43.70, the trader added.

The central bank had been spotted buying dollars to stem

volatility when the peso was around 43.00 per dollar, traders

said.

CURRENCIES VS U.S. DOLLAR

Change on the day at 0430 GMT

Currency Latest bid Previous day Pct Move

*Japan yen 98.75 98.72 -0.03

Sing dlr 1.2423 1.2430 +0.06

Taiwan dlr 29.418 29.470 +0.18

Korean won 1061.95 1060.70 -0.12

Baht 31.28 31.19 -0.29

Peso 43.32 43.21 -0.25

Rupiah 11365.00 11330.00 -0.31

*Rupee 61.74 61.74 +0.00

Ringgit 3.1760 3.1725 -0.11

Yuan 6.0991 6.0995 +0.01

Change so far in 2013

Currency Latest bid End prev year Pct Move

Japan yen 98.75 86.79 -12.11

Sing dlr 1.2423 1.2219 -1.64

Taiwan dlr 29.418 29.136 -0.96

Korean won 1061.95 1070.60 +0.81

Baht 31.28 30.61 -2.14

Peso 43.32 41.05 -5.24

Rupiah 11365.00 9630.00 -15.27

Rupee 61.74 54.99 -10.93

Ringgit 3.1760 3.0580 -3.72

Yuan 6.0991 6.2303 +2.15

* Financial markets in India and Japan are closed for holidays.

(Additional reporting by Masayuki Kitano; Editing by Kim

Coghill)

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