EM ASIA FX-Rupee leads Asia FX gains on U.S., China relief

Reuters

* Asia FX to see weekly gains

* Won, Taiwan dollar up on stock inflows

* S.Korea says watching if offshore speculators moving won

(Adds text, updates prices)

By Jongwoo Cheon

SEOUL, Oct 18 (Reuters) - Most emerging Asian currencies

rose on Friday and posted gains on the week on solid China

growth and as worries about the economic impact of the recent

U.S. government shutdown prompted expectations that the Federal

Reserve may keep its stimulus longer.

The Indian rupee hit its strongest in more than two

months on strong local stocks, outperforming regional peers.

The South Korean won also touched a near

nine-month peak as foreign investors reported the longest buying

streak in Seoul stocks.

The Taiwan dollar advanced on stock inflows.

The U.S. dollar fell broadly as the potential damage to the

economy from the weeks-long shutdown in Washington could prevent

the Fed from dialing back its bond-buying programme at least

until the beginning of next year.

Expectations of a potential shift in the U.S. central bank's

stimulus had weighed on emerging Asian currencies earlier this

year.

Adding to support to regional units, China's economy grew

7.8 percent in the third quarter, its fastest pace this year and

in line with expectations, although volatile global demand may

dent the world's second-largest economy.

The Chinese yuan hit a record high for the fifth

consecutive session to enjoy its best week since February 2012.

"Asian currencies are likely to gain more as expectations

for the Fed tapering eased and China economy is more likely to

see a soft landing," said Yuna Park, a currency and bond analyst

at Dongbu Securities in Seoul.

"It looks good to buy some of battered ones such as the

rupee for a very short-term, especially until the tapering views

revive," Park added.

Emerging Asian currencies were poised for weekly gains, led

by the won.

The South Korean currency has risen 1.0 percent against the

dollar so far this week, according to Thomson Reuters data. The

yuan has risen 0.5 percent.

The Malaysian ringgit has gained 0.9 percent and

the Thai baht has advanced 0.8 percent.

The Singapore dollar has been up 0.6 percent, while

the Taiwan dollar has risen 0.4 percent.

WON

The won rose as much as 0.3 percent to 1,060.1 per dollar,

its strongest since Jan. 21, as foreign investors were set to

extend their buying spree in South Korea's main stock exchange

to a record 36th consecutive session.

The South Korean currency, however, gave up some of initial

gains as a finance ministry official said the country is closely

watching whether offshore speculators are contributing to recent

foreign capital inflows and the won's movements.

Some short-term offshore funds took profits from the won's

gains, traders said.

"The warning is expected to cap the won for a short-term,"

said a foreign bank trader in Seoul.

"But the won will eventually test this year's high. I am

waiting to buy the won on any dips," the trader added, referring

to the won's peak of 1,054.5 per dollar hit on Jan. 15.

TAIWAN DOLLAR

The Taiwan dollar gained as stock inflows lifted local

shares. It also found support from stronger yuan and

won.

Domestic exporters are also expected to buy the Island's

currency around 29.400 to the U.S. dollar.

Investors, however, stayed wary of possible intervention by

the central bank to stem the local dollar's appreciation,

especially after South Korea's warning.

Taiwanese importers bought U.S. dollars for payments around

29.380, limiting the Taiwan dollar's upside.

RUPIAH

The Indonesian rupiah advanced up to 0.4 percent to

11,277 per dollar, its strongest since Sept. 19, on demand from

foreign banks.

The forward onshore market, or Jakarta Interbank Spot Dollar

Rate (JISDOR), was fixed at 11,308, compared to

Thursday's 11,351.

The Indonesian currency is likely to gain further on

expectations that the Fed will delay reductions in its stimulus

programme, traders said.

Predictions of the U.S. central bank's policy shift had hit

the rupiah harder than other emerging Asian currencies because

of Indonesia's current account deficit.

Still, the rupiah's upside is seen limited by dollar bids

from local companies, traders said.

"I see strong resistance at 11,000 as I still think the

dollar demands of Indonesia is huge," a Jakarta-based trader

said.

For the week, the rupiah has gained 0.3 percent against the

dollar.

CURRENCIES VS U.S. DOLLAR

Change on the day at 0510 GMT

Currency Latest bid Previous day Pct Move

Japan yen 98.00 97.93 -0.07

Sing dlr 1.2381 1.2394 +0.10

Taiwan dlr 29.386 29.452 +0.22

Korean won 1061.20 1063.70 +0.24

Baht 31.01 31.04 +0.10

Peso 43.08 43.07 -0.03

Rupiah 11320.00 11325.00 +0.04

Rupee 61.00 61.23 +0.39

Ringgit 3.1500 3.1495 -0.02

Yuan 6.0930 6.0982 +0.09

Change so far in 2013

Currency Latest bid End prev year Pct Move

Japan yen 98.00 86.79 -11.44

Sing dlr 1.2381 1.2219 -1.31

Taiwan dlr 29.386 29.136 -0.85

Korean won 1061.20 1070.60 +0.89

Baht 31.01 30.61 -1.29

Peso 43.08 41.05 -4.71

Rupiah 11320.00 9630.00 -14.93

Rupee 61.00 54.99 -9.85

Ringgit 3.1500 3.0580 -2.92

Yuan 6.0930 6.2303 +2.25

(Additional reporting by Roger Tung in TAIPEI; Editing by Kim

Coghill)

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