EM ASIA FX-Inflows support won, but rupiah down on deficit

Reuters

* Won up on foreign stock, bond buying; central bank ignored

* Rupiah down on importers' dlr demand

* Sing dlr edges up on stop-loss U.S. dlr selling

(Adds text, updates prices)

By Jongwoo Cheon

SINGAPORE, Feb 14 (Reuters) - The South Korean won rose on

foreign inflows, leading slight gains among emerging Asian

currencies on Thursday, while the Indonesian rupiah slid after

the country posted a larger-than-expected current account

deficit.

The Malaysian ringgit advanced on bids from

interbank speculators and some exporters. The Singapore dollar

edged higher on stop-loss selling of the U.S. dollar.

Still, regional units gave up much of their initial gains as

the yen slid again.

"Firmer risk sentiment helped Asian stocks and currencies,

but investors do not have a strong conviction for a clear

direction yet. They can unwind risk positions any time," said

Jeong My-young, Samsung Futures' research head in Seoul.

"Still, expectations of a weaker yen are pretty strong,

although it (the yen) may not plunge further from here," Jeong

added.

Emerging Asian currencies have been under pressure from a

softer yen as its weakness dented export competitiveness of

Japan's neighbours such as South Korea.

Regional authorities have expressed concerns over the

appreciations of their currencies, a result of policy easing by

major central banks including the Bank of Japan.

Japan's central bank kept monetary policy steady as expected

on Thursday, but the general consensus is that the government

will continue to put pressure on the BOJ to launch more

aggressive easing.

However, the central bank may prefer to hold off on

expanding stimulus in March and wait until the first rate review

under a new BOJ governor, scheduled for April 3-4, to save its

limited policy options, some analysts say.

Investors are now looking out to a meeting of the Group of

20 finance ministers and central bankers in Moscow on Friday and

Saturday to gauge their possible response to the yen's recent

weakness.

WON

The won advanced as foreign investors continued to buy South

Korean stocks and bonds. Offshore funds also purchased the

currency, traders said.

Currency investors showed muted reactions to the central

bank's decision to leave interest rates unchanged as expected.

But investors were reluctant to chase the won further as the

yen fell.

A weaker yen hurts South Korean exporters' competitiveness

and earnings. That raises the risk of possible steps to curb the

won's appreciation.

Technically, the won also has chart resistance between 1,080

per dollar and 1,083.

"Dollar supplies were pretty strong, but I don't think the

won would strengthen past 1,080. It is locked in a range between

1,080 and 1,100," said a senior foreign bank dealer in Seoul.

RUPIAH

The rupiah slid on dollar demand from local importers,

bucking the overall strength in its Asian peers.

On Wednesday, the country reported a 2012 current account

deficit equivalent to 2.7 percent of gross domestic product,

wider than an initially forecast 2.4 percent.

Investors stayed cautious over possible dollar-selling

intervention by the central bank to support the rupiah, traders

said.

Bank Indonesia is gradually closing trading loopholes used

by global investors in an attempt to exert more control over its

weakening currency and prevent a desirable depreciation of the

rupiah from turning into a panicky tailspin.

The wider deficit have led some analysts to predict the

rupiah will weaken further to 10,000 per dollar this year.

Still, some dealers and analysts said recent inflows to the

country's stocks and bonds will buffer the downside, adding that

the country's current account balance may improve.

"The current account data is backward looking, so I won't

read too much into it," said a European bank dealer in

Singapore.

"The current account will improve, especially this quarter

onwards, because of a recovery in commodity prices," the dealer

added.

Jakarta stocks hit a record high earlier.

RINGGIT

The ringgit gained as interbank speculators bought it, while

some exporters started selling dollars for settlements.

Still, investors hesitated to add bullish positions in the

ringgit further on continued caution over the upcoming election

in mid-2013.

"Most people prefer to buy the dollar on dips at 3.08. Some

uncertainty over the election will also help long dollar/ringgit

positions," said a senior Malaysian bank trader in Kuala Lumpur.

SINGAPORE DOLLAR

The Singapore dollar rose against the U.S. dollar on

stop-loss selling of the greenback, traders said.

Some offshore investors also bought the city-state currency

against the euro and the sterling, traders

said.

The Singapore dollar hit 1.9154 to the British currency, its

strongest at least since 1982, according to Thomson Reuters

data.

Sterling fell across the board after the Bank of England

said it was ready to ease policy further despite high inflation.

But some investors took profits from the Singapore dollar's

gains against the greenback around 1.2330-1.2340, traders said.

CURRENCIES VS U.S. DOLLAR

Change on the day at 0635 GMT

Currency Latest bid Previous day Pct Move

Japan yen 93.53 93.27 -0.28

Sing dlr 1.2364 1.2369 +0.04

*Taiwan dlr 29.725 29.750 +0.08

Korean won 1083.70 1086.80 +0.29

Baht 29.80 29.81 +0.03

Peso 40.63 40.67 +0.10

Rupiah 9660.00 9645.00 -0.16

Rupee 53.84 53.82 -0.04

Ringgit 3.0865 3.0905 +0.13

*Yuan 6.2325 6.2325 +0.00

Change so far in 2013

Currency Latest bid End prev year Pct Move

Japan yen 93.53 86.79 -7.21

Sing dlr 1.2364 1.2219 -1.17

Taiwan dlr 29.725 29.136 -1.98

Korean won 1083.70 1070.60 -1.21

Baht 29.80 30.61 +2.72

Peso 40.63 41.05 +1.03

Rupiah 9660.00 9630.00 -0.31

Rupee 53.84 54.99 +2.14

Ringgit 3.0865 3.0580 -0.92

Yuan 6.2325 6.2303 -0.04

* Financial markets in China and Taiwan are closed for holidays.

(Additional reporting by; Editing by Shri Navaratnam)

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