By Kim Kyoungwha
Dec. 22 (Bloomberg) -- South Korea’s won and Taiwan’s dollar led declines in Asian currencies on concern a global recession will cut demand for goods produced in the region.
Japan’s exports plunged the most on record in November as sales of cars and electronic goods collapsed, a government report showed today. Data due tomorrow may show a slump in overseas orders for Taiwanese goods. Indonesia’s rupiah, which reached a seven-week high on Dec. 19, fell for the first time in five days. The won slid the most in three weeks and Taiwan’s dollar had the biggest drop since 2001.
“Those who were bulled up about selling dollars last week must be having second thoughts,” said Sean Callow, a currency strategist with Westpac Banking Corp. in Sydney. “Asian forecasters have been overestimating growth in recent months so I would say the market has not fully priced in the 2009 outlook.”
South Korea’s won declined 1.3 percent to 1,307.50 against the dollar at the 3 p.m. local close, according to Seoul Money Brokerage Services Ltd. It’s down 29 percent this year, making it Asia’s worst performer. Taiwan’s dollar dropped 1.2 percent to NT$32.930.
“External sector weakness going into 2009 has become a dominant factor again,” said Christy Tan, a foreign-exchange strategist at Bank of America Corp. in Singapore.
Japan’s exports fell 26.7 percent from a year earlier, the Finance Ministry said today in Tokyo. Economists surveyed by Bloomberg News predicted a 22.3 percent decline in shipments from Asia’s largest economy. The drop was the sharpest since comparable data were made available in 1980.
Yen Intervention?
The yen slipped to the lowest level in almost a week against the dollar on concern Bank of Japan Governor Masaaki Shirakawa will signal intervention to aid exporters.
Toyota Motor Corp., the world’s second-biggest automaker, said today that it expects its first operating loss in 71 years because of plunging car sales in North America and Europe and a surging yen.
The Japanese currency weakened to 89.74 per dollar in Tokyo from 89.31 late in New York on Dec. 19. The yen today touched 90.23, its weakest since Dec. 16. It reached a 13-year high of 87.14 last week.
Central banks intervene in currency markets by arranging sales or purchases of foreign exchange.
‘Bad Shape’
Taiwan’s dollar fell for a second day, extending its decline from a two-month high, as a government report tomorrow may show that the island’s export orders dropped the most in seven years. Orders fell 13.6 percent in November from a year earlier, according to economists surveyed by Bloomberg News.
“Exports have been in a bad shape,” said Cindy Wang, a currency trader at Bank SinoPac in Taipei. “Gains in the local dollar are negative for competitiveness of exports.”
The Taiwan dollar fell as much as 1.7 percent to NT$33.100, after climbing 2.4 percent last week, the most in a decade. The central bank intervened last week to check its advance, the China Times newspaper, which is based in Taipei, reported on Dec. 19.
The Philippine peso had its biggest drop in almost three weeks. The peso fell 0.8 percent to 47.313 in Manila. Money sent home by Filipinos working overseas for the Christmas holidays helped drive a 2.5 percent gain in the peso last week, the most in five months.
Trading Volume
The Malaysian ringgit slipped 0.3 percent to 3.4805, extending its decline from an 11-week high, as a seasonal slump in trading volumes prompted traders to hoard dollars. The currency’s 14-day relative strength index, a technical chart used to flag potential turning points in prices, ended last week at 24. Readings below 30 suggest the ringgit may weaken.
“No one wants to be caught short dollars going into year- end as the markets will be increasingly thin and prices will jump around in a volatile and erratic manner,” said Suresh Kumar Ramanathan, a rates and currency strategist at CIMB Investment Bank Bhd. in Kuala Lumpur.
The Chinese yuan and Vietnam’s dong were both little changed versus the dollar at 6.8484 and 16,987 respectively. India’s rupee depreciated 0.9 percent to 47.685. Thailand’s baht fell 0.1 percent to 34.53, while the Singapore dollar rose 0.4 percent to S$1.4477.
To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net.
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