* Rupiah falls 1 pct on weaker stocks, bonds
* Won firmer after U.S. Treasury report
* S.Korea still suspected of intervening
(Adds text, updates prices.)
By Jongwoo Cheon
SINGAPORE, Oct 31 (Reuters) - Most emerging Asian currencies
fell on Thursday as the Federal Reserve's steady stance
disappointed some expectations of more dovish comments,
prompting investors to book profits from monthly gains in
The Indonesian rupiah and the Philippine peso
led the daily depreciation. Malaysia's ringgit also
slid as investors cut bullish bets on the best performing
emerging Asian currency in October.
The South Korean won, however, edged higher after
a U.S. Treasury report urged Asia's fourth-largest economy to
refrain from targeting exchange rate.
The Fed on Wednesday decided to keep buying $85 billion in
assets a month and sounded only slightly less optimistic about
growth. However, it dropped a phrase expressing concern about a
run-up in borrowing costs, suggesting it was comfortable with
interest rates at their current level.
Traders of rate futures kept bets in place that the U.S.
central bank will wait to raise rates until at least April 2015.
Emerging Asian currencies are unlikely to extend gains in
November as expectations of steady U.S. monetary policy have
been widely priced in, traders and analysts said.
"Asian currencies may lose appreciation momentum. They have
reflected the Fed's policy, but they have not priced in possible
rebound in the U.S. economy," said Yuna Park, a currency and
bond analyst at Dongbu Securities in Seoul.
"It may be better to reduce Asia FX positions on rallies
rather than to add more. Some Asian stocks are seen overbought,"
In October, emerging Asian currencies are poised to see
The ringgit has risen 3.2 percent against the dollar, which
would be the largest monthly gain since January 2012, according
to Thomson Reuters data. Investors welcomed the government's
plans to tackle a fiscal deficit including a new consumption
The rupiah has advanced 2.6 percent on capital inflows.
Indonesia was seen one of the most vulnerable to the Fed's
possible cut in the bond-buying programme due to the country's
current account deficit.
The Indian rupee has gained 2.0 percent, while both
the Singapore dollar and the won have been
up 1.4 percent.
The Philippine peso has risen 0.6 percent.
The rupiah fell as bond yields extended rises and stocks
underperformed most of regional peers.
The five-year bond yield rose to 6.883 percent
from the previous day's 6.748 percent, while three-year yield
advanced to 6.742 percent from 6.645 percent.
Month-end dollar demand also put pressure on the rupiah,
"The rupiah is still vulnerable," said a Jakarta-based
trader, adding the trader has already built up short positions
in the rupiah around 11,000 to the dollar.
Investors are awaiting September trade and October inflation
data due on Friday. The country's trade balance is expected to
have swung into deficit in September, while inflation in October
may have ticked up, a Reuters poll showed.
Another currency trader in Jakarta said some investors may
look for chances to buy the rupiah on dips due to some hopes
that those economic indicators may be better than expected.
The peso fell 0.4 percent to 43.29 per dollar, its weakest
since Oct. 10, as interbank speculators covered dollar-short
positions before a long weekend.
The Philippine financial markets will be closed on Friday
for a holiday.
Local bond yields also rose, putting pressure on the peso.
The won edged up on exporters' month-end demand and after a
U.S. Treasury report urged South Korea to refrain from targeting
the exchange rate and only resort to intervention under
Morgan Stanley said it prefers the won on the possibility of
increased political pressure.
"We remain short (dollar/won), looking for an eventual break
of the post-Lehman low of 1,048 to open the way for a move
towards 1,000," Morgan Stanley said in a client note.
The won's upside, however, was limited as South Korea's
foreign exchange authorities were suspected of buying dollar to
stem its appreciation, traders said.
A South Korean foreign exchange official said that the
authorities had no plans to change their exchange rate stance.
Traders hesitated to chase the won around current levels.
"The authorities carried out only smoothing operation," said
a senior foreign bank trader in Seoul, referring to the
authorities' actions to limit volatility.
"Despite exporters' demand, it is difficult for interbank
players to buy the won here."
CURRENCIES VS U.S. DOLLAR
Change on the day at 0440 GMT
Currency Latest bid Previous day Pct Move
Japan yen 98.41 98.53 +0.12
Sing dlr 1.2390 1.2393 +0.02
Taiwan dlr 29.375 29.475 +0.34
Korean won 1059.55 1060.20 +0.06
Baht 31.08 31.06 -0.06
Peso 43.27 43.10 -0.38
Rupiah 11280.00 11165.00 -1.02
Rupee 61.35 61.24 -0.18
Ringgit 3.1565 3.1485 -0.25
Yuan 6.0950 6.0938 -0.02
Change so far in 2013
Currency Latest bid End prev year Pct Move
Japan yen 98.41 86.79 -11.81
Sing dlr 1.2390 1.2219 -1.38
Taiwan dlr 29.375 29.136 -0.81
Korean won 1059.55 1070.60 +1.04
Baht 31.08 30.61 -1.51
Peso 43.27 41.05 -5.12
Rupiah 11280.00 9630.00 -14.63
Rupee 61.35 54.99 -10.36
Ringgit 3.1565 3.0580 -3.12
Yuan 6.0950 6.2303 +2.22
(Additional reporting by IFR Markets' Catherine Tan; Editing by
- Budget, Tax & Economy
- exchange rate