* Taiwan dlr up on foreign investors, exporters; c.bank caps
* Won up on offshore funds, exporters; intervention
suspected
* Baht firm on inflows, short-covering; rate cut views limit
(Adds text, updates prices)
By Jongwoo Cheon
SEOUL, May 21 (Reuters) - The Taiwan dollar and the South
Korean won led gains among emerging Asian currencies on Tuesday,
as investors covered short positions in regional units before
Federal Reserve Chairman Ben Bernanke's congressional testimony
and on a strong Chinese yuan.
Offshore funds and exporters lifted the won,
while the Taiwan dollar rose on demand from foreign financial
institutions and corporate bids.
The Thai baht also gained on inflows and as
investors reduced bearish positions, although expectations of
measures to curb the currency's strength, including a rate cut
limited its upside.
Still, investors stayed cautious, focusing on whether
Bernanke suggests the Fed will soon start scaling back its
stimulus at Wednesday's testimony, as hinted at by a Fed
regional president last week.
"Bernanke may or may not signal the Fed will taper its
quantitative easing. But if expectations of the shift grows with
more solid data in the second half, that is not positive to
emerging Asian currencies," said Yuna Park, a currency and bond
analyst at Dongbu Securities in Seoul.
"In addition, regional authorities will not allow currency
appreciation," Park added.
Most emerging Asian currencies have eased so far this month
on increasing speculation that the Fed may reduce its
bond-buying programme sooner than later.
Such a move is expected to reduce global liquidity and
inflows to emerging Asian countries.
Meanwhile, investors were keeping an eye on the Bank of
Japan's two-day policy meeting which started on Tuesday.
The central bank is expected to keep policy unchanged but
could tinker with its bond-buying plan to curb a recent rise in
Japanese yields.
Analysts said the yen looked set to resume its recent
weakening as Tokyo was committed to easier monetary policy.
That could put pressure on other emerging Asian currencies
as a weaker yen hurts the export competitiveness of Japan's
rivals such as South Korea.
Other Asian currencies have been concerned over hot money
inflows, warning of potential measures to curb currency
appreciation.
TAIWAN DOLLAR
The Taiwan dollar rose as foreign financial institutions and
local exporters chased it, traders said.
A stronger Chinese yuan also supported the island's
currency.
Investors also bought Taiwan dollar forwards with one-month
U.S. dollar/Taiwan dollar non-deliverable forwards
down 0.4 percent at 29.794.
The central bank was spotted intervening to limit the Taiwan
dollar's upside, but official U.S. dollar purchases were not
strong, traders said.
WON
The won gained as demand from offshore funds and exporters
prompted stop-loss dollar selling among local interbank
speculators.
But the South Korean currency found resistance at 1,110.0
per dollar as some suspected intervention by the foreign
exchange authorities.
That came as the won rose nearly 1 percent to 10.8209 to the
yen, a notch weaker than 10.8131, its strongest since
September 2008.
South Korea competes with Japan in key export markets, so a
stronger won against the yen is a major concern to Seoul's
policy makers.
BAHT
The baht advanced on short-covering, while real money funds
and medium-term speculators bought it.
The Thai currency is likely to extend gains unless Bernanke
signals the Fed may scale back its bond-buying programme,
traders said.
But investors stayed cautious over the financial
authorities' measures to curb the baht's strength, especially as
disappointing first quarter growth spurred expectations of a
rate cut on May 29.
Bank of Thailand Governor Prasarn Trairatvorakul said he was
ready to ease monetary policy if the economy was really slowing,
but he wanted to see further details about weakness in private
consumption suggested in first-quarter data.
"I still think the dollar is a buy on dips. Eyes will be on
the MPC next week, which is poised for a likely 25 bps cut,"
said a foreign bank trader in Singapore, referring to the
central bank's monetary policy committee.
"A rate cut should push dollar/baht higher."
CURRENCIES VS U.S. DOLLAR
Change on the day at 0655 GMT
Currency Latest bid Previous day Pct Move
Japan yen 102.58 102.27 -0.30
Sing dlr 1.2549 1.2542 -0.06
Taiwan dlr 29.819 30.030 +0.71
Korean won 1110.62 1116.80 +0.56
Baht 29.70 29.81 +0.37
Peso 41.15 41.19 +0.10
Rupiah 9765.00 9755.00 -0.10
Rupee 55.04 55.10 +0.12
Ringgit 3.0105 3.0145 +0.13
Yuan 6.1310 6.1389 +0.13
Change so far in 2013
Currency Latest bid End prev year Pct Move
Japan yen 102.58 86.79 -15.39
Sing dlr 1.2549 1.2219 -2.63
Taiwan dlr 29.819 29.136 -2.29
Korean won 1110.62 1070.60 -3.60
Baht 29.70 30.61 +3.06
Peso 41.15 41.05 -0.23
Rupiah 9765.00 9630.00 -1.38
Rupee 55.04 54.99 -0.08
Ringgit 3.0105 3.0580 +1.58
Yuan 6.1310 6.2303 +1.62
(Additional reporting by Jeanny Kao in TAIPEI and IFR Markets'
Catherine Tan in SINGAPORE; Editing by Jacqueline Wong)
