U.S. Markets closed

EM ASIA FX-Baht falls, Asian currencies slip back after rally

* Asia FX mostly lower after previous day's rally vs dollar

* Focus on duration of U.S. government shutdown

* Baht leads drop, pressured by gold's fall overnight

* Taiwan dollar bucks trend, holds firm

By Masayuki Kitano

SINGAPORE, Oct 2 (Reuters) - Asian currencies were mostly

lower on Wednesday, taking a breather after having rallied

against the dollar the previous day when the U.S. government

began a partial shutdown.

Emerging Asian currencies had climbed broadly versus the

greenback on Tuesday, partly on speculation that the U.S.

government shutdown may lessen the chances of the Federal

Reserve scaling back its monetary stimulus very soon.

The drop in the greenback and the rally in Asian currencies

lost steam, however, amid uncertainty over whether the U.S.

government shutdown would prove short-lived or drag on.

"That's the big debate ... how long the shutdown persists,"

said Sim Moh Siong, FX strategist for Bank of Singapore.

"I think the market overall is perhaps a bit hopeful that

the shutdown could be quite brief," Sim said, adding that there

were also hopes that an agreement on the U.S. debt ceiling would

be reached as part of the ongoing negotiations.

The Thai baht led the drop in Asian currencies,

coming under pressure after the previous day's sharp slide in

gold prices triggered demand for the dollar.

The precious metal is popular among Thai investors, and

falls in gold prices often prompt some to buy physical gold or

futures. In turn, they need dollars to make such purchases.

While most emerging Asian currencies retreated, the Taiwan

dollar bucked the trend and edged higher, with traders saying

some overseas players were still selling the dollar because of

the U.S. government's partial shutdown.


The Indonesian rupiah retreated due to corporate

demand for the dollar, traders said. A Jakarta-based trader said

the dollar buying was by local importers.

The rupiah, which had rallied on Tuesday after Indonesia

reported a surprise trade surplus in August, fell 0.4 percent to

11,555 versus the dollar.

The rupiah had set a 4-1/2 year low versus the dollar of

11,660 on Monday, according to Thomson Reuters data.


The South Korean won was little changed versus the dollar at


Market participants said they expected it would be difficult

for the won to rise above the 1,070 level in the near term due

to the threat of intervention to curb the won's recent gains.

South Korea's finance ministry has recently warned it is

watching markets closely for volatility in the won against the



* Chinese markets are closed from Oct. 1 through Oct.7 for

the National Day holiday.

* Indian markets are closed on Wednesday for a holiday.

Change on the day at 0606 GMT

Currency Latest bid Previous day Pct Move

Japan yen 97.67 98.01 +0.35

Sing dlr 1.2531 1.2518 -0.10

Taiwan dlr 29.490 29.615 +0.42

Korean won 1073.85 1073.50 -0.03

Baht 31.30 31.13 -0.54

Peso 43.40 43.33 -0.17

Rupiah 11555.00 11515.00 -0.35

Rupee 62.46 62.46 +0.00

Ringgit 3.2340 3.2345 +0.02

Yuan 6.1220 6.1220 +0.00

Change so far in 2013

Currency Latest bid End prev year Pct Move

Japan yen 97.67 86.79 -11.14

Sing dlr 1.2531 1.2219 -2.49

Taiwan dlr 29.490 29.136 -1.20

Korean won 1073.85 1070.60 -0.30

Baht 31.30 30.61 -2.20

Peso 43.40 41.05 -5.41

Rupiah 11555.00 9630.00 -16.66

Rupee 62.46 54.99 -11.96

Ringgit 3.2340 3.0580 -5.44

Yuan 6.1220 6.2303 +1.77


(Additional reporting by Emily Chan in TAIPEI, Christine Kim in

SEOUL; Editing by Chris Gallagher)