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EM ASIA FX-Rupee leads Asia FX gains on relief Summers won't be Fed chief

* Won at 6-1/2 mth high as foreigners keep buying stocks

* S.Korea authorities seen defending 1,080/dlr - traders

* Taiwan dollar up on foreign financial institutions

* Sing dlr breaches 1.2630/dlr resistance area

(Adds text, updates prices)

By Jongwoo Cheon

SINGAPORE, Sept 16 (Reuters) - The Indian rupee hit a near

one-month high on Monday, leading gains in emerging Asian

currencies as Lawrence Summers quit the race to be Federal

Reserve chief, sparking hopes that the U.S. central bank may

keep monetary policy loose for longer.

Former Treasury Secretary Summers was seen by investors as

relatively more hawkish and his withdrawal could leave Janet

Yellen, a well-known policy dove, as front-runner for Fed


News of Summers' decision sparked rallies in Asian stocks,

bonds and currencies.

The rupee jumped to as high as 62.45 per dollar,

its strongest since Aug. 19. The South Korean won

hit a 6-1/2 month high on continuous stock inflows.

The Taiwan dollar gained on demand from foreign

financial institutions, while the Singapore dollar hit

a five-week high on short-covering.

Still, investors were cautious on adding more bullish bets

on regional units ahead of a Fed policy meeting on Tuesday and

Wednesday. The U.S. central bank is expected to scale back its

$85 billion monthly bond-buying programme by $10 billion.

"Support for currencies on the back of the assumption of a

dovish new Fed Chair in Yellen should prove only fleeting into

the Fed 'taper' meeting, as much is on the line as we move into

the decision," Scotiabank said in a client note.

Late last week, most emerging Asian currencies pared some of

their weekly gains on caution before the Fed meeting and a

Japanese newspaper report saying Summers would be nominated as

its chief.

But regional currencies may not weaken much if the Fed dial

down its stimulus by the amount forecast and Fed Chairman Ben

Bernanke is not hawkish, analysts and traders said.

Such expectations have been priced in to some degree, they


"If Bernanke sticks to the market script of a USD10bn taper

with no overly hawkish overtones, markets may attempt to extend

the Risk-On trade," OCBC Bank said.


The Taiwan dollar rose on inflows from foreign financial

institutions and on a jump in local equities.

But the island's currency's upside was limited on U.S.

dollar demand from importers and as investors stayed cautious

over possible intervention by the central bank around 29.600 to

the greenback, traders said.

Investors also hesitated to build up large positions ahead

of holidays. Taiwanese financial markets will be closed on

Thursday and Friday.


The baht gained as Bangkok stocks outperformed most

of regional peers, while 5-year and 10-year bond yields


But its upside was capped as importers were expected to buy

the dollar for payments, traders said.


The Singapore dollar advanced 0.8 percent to 1.2595 to the

U.S. dollar, its strongest since Aug. 12 as investors scrambled

for the city-state's currency to cover short positions.

The move helped the Singapore dollar clear a chart

resistance area around 1.2630, its downtrend line. The currency

also has the 38.2 percent Fibonacci retracement at 1.2634 of its

depreciation between May and July.

It may head to 1.2564, the 50 percent retracement, although

the level is seen as a solid resistance line, analysts and

traders said.

"As the trendline was broken, investors are likely to buy

SGD around 1.2670-1.2680 on dips, but we may also see some

profit-taking," said a foreign bank trader in Singapore.


The won rose as much as 0.5 percent to 1,081.0 per dollar,

its strongest since Feb. 28 on demand from offshore funds.

Foreign investors extended a buying spree in Seoul's main

stock market to a 17th consecutive session, according to

Korea Exchange data.

But the South Korean currency faced strong resistance around

1,080 as traders said foreign exchange authorities were spotted

aggressively defending the level.

With such intervention, local importers bought dollars,

while exporters stepped away, they added.

"It may be safe to add dollar holdings here. If the level is

continued to be held, we may see more dollar demand," said a

senior foreign bank trader in Seoul.


Change on the day at 0455 GMT

Currency Latest bid Previous day Pct Move

Japan yen 98.91 99.39 +0.49

Sing dlr 1.2627 1.2696 +0.55

Taiwan dlr 29.643 29.842 +0.67

Korean won 1082.45 1087.00 +0.42

Baht 31.66 31.87 +0.66

Peso 43.70 43.86 +0.37

Rupiah 11400.00 11420.00 +0.18

Rupee 62.66 63.49 +1.32

*Ringgit 3.2880 3.2900 +0.06

Yuan 6.1179 6.1188 +0.01

Change so far in 2013

Currency Latest bid End prev year Pct Move

Japan yen 98.91 86.79 -12.25

Sing dlr 1.2627 1.2219 -3.23

Taiwan dlr 29.643 29.136 -1.71

Korean won 1082.45 1070.60 -1.09

Baht 31.66 30.61 -3.32

Peso 43.70 41.05 -6.06

Rupiah 11400.00 9630.00 -15.53

Rupee 62.66 54.99 -12.24

Ringgit 3.2880 3.0580 -7.00

Yuan 6.1179 6.2303 +1.84

* Financial markets in Malaysia are closed for a holiday.

(Additional reporting by Miao-jung Lin in TAIPEI and Reuters FX

Analyst Krishna Kumar; Editing by Richard Borsuk)