By Kim Kyoungwha
April 13 (Bloomberg) -- Asian currencies gained, led by Indonesia’s rupiah and the Philippine peso, as a global stocks rally fanned demand for riskier assets.
Seven of Asia’s 10 most-used currencies excluding the yen strengthened versus the dollar today, after the MSCI World Index of shares climbed in each of the last five weeks. The rupiah was the region’s biggest gainer, climbing to a two-month high after elections strengthened President Susilo Bambang Yudhoyono’s hold on parliament.
“The firmer tone in the stock markets has supported Asian currencies,” said Jerry Yoshikoshi, a senior economist with Sumitomo Mitsui Banking Corp. in Singapore.
The rupiah rose 1.8 percent to 11,110 per dollar as of 3:54 p.m. in Jakarta, according to data compiled by Bloomberg. It earlier touched 11,085, the strongest since January. The peso climbed 0.5 percent to 47.783. Taiwan’s dollar strengthened 0.3 percent to NT$33.6970 as overseas investors added to their holdings of the island’s shares for a third day.
The MSCI Asia Pacific Index of regional stocks rose 0.3 percent to 88.20, set for its highest close in three months, after Japan more than doubled an economic stimulus package and China reported a record jump in lending. The index has jumped 25 percent since reaching a five-year low on March 9.
The People’s Bank of China said yesterday that the country will ensure there’s sufficient liquidity after new loans surged. Japan’s Prime Minister Taro Aso last week announced his third spending plan, which will total 56.8 trillion yen ($566 billion).
Weaker Yen
The yen fell to a six-month low against Australia’s dollar as speculation a global recession is easing spurred demand for higher-yielding assets financed with the Japanese currency.
The yen dropped to 72.90 against Australia’s dollar in Tokyo from 72.10 at the end of last week. Japan’s benchmark interest rate is 0.1 percent, compared with 3 percent in Australia.
The Philippine peso gained against the U.S. dollar before a report this week that may show money sent home by overseas workers increased in February. A BusinessMirror report said there are more than 221,000 jobs available for Filipinos in the Middle East this year.
Remittances from Filipinos based abroad account for about a 10th of the Philippine economy and are the second-largest source of foreign exchange, after exports.
“If remittance growth continues to be up or at least flat, that is positive for the peso,” said Rafael Algarra, treasurer at Security Banking Corp. in Manila.
Foreign Investors
Extra spending by Asian governments to stimulate their economies and revive exports is helping boost investor sentiment in emerging markets.
Taiwan’s currency has risen 4.5 percent since touching a seven-year low on March 3 as the benchmark Taiex index of stocks rallied 32 percent. Foreign investors bought NT$30.5 billion ($905 million) more of the island’s shares than they sold in the past three trading sessions, stock exchange figures show.
“The Taiwan dollar is stronger due to the stock market, which has gained quite a bit,” said Henry Lin, a foreign- exchange trader at Shin Kong Commercial Bank in Taipei. “Investors are also taking their cues from U.S. stocks.”
Thailand’s baht fell the most in 10 months in offshore trading on concern violent anti-government protests will deter investment and force Prime Minister Abhisit Vejjajiva to step down.
The currency extended its loss this year to 2.8 percent as protesters calling for Abhisit’s resignation defied a state of emergency to stage rallies in Bangkok, prompting the government to send in troops to restore order. Continued unrest may worsen an economy facing its first annual contraction in 11 years.
‘Pivotal Moment’
Thailand’s credit rating may be lowered as the violence escalates, Standard & Poor’s said today. The ratings agency said it has a negative outlook, which “implies there is a significant chance of a ratings downgrade,” Kim Eng Tan, a director of sovereign ratings, said in an interview in Singapore.
“It is a pivotal moment, really,” said Sumitomo Mitsui’s Yoshikoshi. “Even if Abhisit resigns, I don’t think it will change the political climate in the longer term. We have been bearish on the country in the long-term. The baht will be an underperformer in coming months.”
The baht fell 0.8 percent to 35.67 per dollar in Singapore, according to data compiled by Bloomberg. Financial markets in Thailand are closed until April 16 for the Thai New Year holiday.
Elsewhere, the Korean won rose 0.2 percent to 1,329.50 per dollar and Singapore’s dollar rose 0.2 percent to S$1.5147. Malaysia’s ringgit fell 0.4 percent to 3.6291, while China’s yuan was unchanged at 6.8336.
To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net.
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