EM ASIA FX-Rupiah leads Asia FX gains; ringgit higher before budget

Reuters

* Rupiah to see best week since Sept 2009 on inflows

* Malaysia PM Najib's budget speech eyed

* Won dips on intervention caution, exporters limit losses

(Adds text, updates prices)

By Jongwoo Cheon

SINGAPORE, ct 25 (Reuters) - The Indonesian rupiah hit a

near eight-week high on Friday, leading gains among emerging

Asian currencies, as expectations the U.S. Federal Reserve will

maintain its bond-buying programme through early next year kept

the dollar pressured.

The rupiah is poised to enjoy the best week in more

than four years on capital inflows and demand from real money

funds.

The Malaysian ringgit gained on hopes the

government will announce later in the day measures to cut the

fiscal deficit.

The dollar stayed around a nine-month low against a basket

of major currencies as a disappointing U.S. jobs data earlier

this week cemented views that the Fed's plans to taper its

stimulus won't start until next year.

"With the market pushing out the timing of Fed tapering

until March 2014, further portfolio inflows into emerging Asia

can be expected in the near-term," ANZ said in a client note.

Even before the U.S. September payrolls number, most

emerging Asian currencies had gravitated to the view that the

recently-ended 16-day U.S. government shutdown will likely

prompt the Fed to delay a shift in policy.

The rupiah took top honours in emerging Asia this week,

making the most out of the dollar's dour near term outlook.

The Indonesian currency has risen 3.0 percent against the

dollar, the largest weekly gain since the week ended on June 5,

2009, according to Thomson Reuters data.

The rupiah is seen as one of the most vulnerable to the

Fed's tapering due to Indonesia's sizable current account

deficit. It remains the worst-performing Asian currency of the

year.

Last week, central bank Governor Agus Martowardojo said the

current account deficit is likely to ease to less than 3 percent

of gross domestic product. The gap hit 4.4 percent in the second

quarter.

The ringgit has also gained 0.4 percent so far this week,

while the Taiwan dollar has risen 0.2 percent. The

Singapore dollar is up 0.1 percent.

The South Korean won took a different path,

turning weaker for the week with a 0.1 percent loss after the

foreign exchange authorities on Thursday were spotted buying

dollars after earlier warning against "excessive" won moves.

RUPIAH

The rupiah rose as much as 1.6 percent to 10,970 per dollar,

its strongest since Sept. 2, on demand from custodian banks.

The forward onshore market, or Jakarta Interbank Spot Dollar

Rate (JISDOR), was fixed at 11,142 per dollar,

compared with Thursday's 11,268.

Five-year Indonesian government bond yield fell

to 6.896 percent, the lowest since July 10. Three-year yield

also slid to 6.631 percent, the lowest since June 25.

Domestic shares eased, but the market enjoyed

foreign buying in the previous two sessions.

A Jakarta-based trader said the rupiah may strengthen to

10,700.

RINGGIT

The ringgit advanced on hopes that the government may

announce steps to tackle Malaysia's fiscal deficit when Prime

Minister Najib Razak unveils the 2014 budget.

"Our fundamental view is mildly bullish on the budget and we

expect price to head towards 3.0770 should the budget meet

expectations," Maybank said, referring to the ringgit's value to

the dollar, in a note.

Still, local investors took profits to guard against any

disappointment from the prime minister's proposals.

The Malaysian currency has a chart resistance at 3.1410, a

200-day moving average.

WON

The won edged down as offshore funds sold the currency on

heightened caution over possible intervention by the

authorities.

Foreign investors were poised to report their first selling

day in Seoul's main stock market in 41 sessions.

Still, the won found relief from exporters' month-end demand

for settlements, traders said.

South Korea's economy grew 1.1 percent in the third quarter

from the previous three months, the central bank estimated,

slightly beating market expectations.

"The authorities are likely to keep the won around the

current level. The won's resistance is seen firmer if foreigners

stop a buying spree in the stock market," said a foreign bank

trader in Seoul.

CURRENCIES VS U.S. DOLLAR

Change on the day at 0430 GMT

Currency Latest bid Previous day Pct Move

Japan yen 97.01 97.29 +0.29

Sing dlr 1.2372 1.2374 +0.02

Taiwan dlr 29.401 29.452 +0.17

Korean won 1061.90 1061.00 -0.08

Baht 31.14 31.16 +0.08

Peso 43.07 43.09 +0.05

Rupiah 10975.00 11140.00 +1.50

Rupee 61.54 61.46 -0.13

Ringgit 3.1455 3.1605 +0.48

Yuan 6.0823 6.0820 -0.00

Change so far in 2013

Currency Latest bid End prev year Pct Move

Japan yen 97.01 86.79 -10.53

Sing dlr 1.2372 1.2219 -1.24

Taiwan dlr 29.401 29.136 -0.90

Korean won 1061.90 1070.60 +0.82

Baht 31.14 30.61 -1.69

Peso 43.07 41.05 -4.69

Rupiah 10975.00 9630.00 -12.26

Rupee 61.54 54.99 -10.64

Ringgit 3.1455 3.0580 -2.78

Yuan 6.0823 6.2303 +2.43

(Additional reporting by KyoungHo Lee in SEOUL and IFR Markets'

Catherine Tan; Editing by Shri Navaratnam)

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