* Won up on stock inflows; ING's sale of KB stake eyed * ING deal may spur won bids as foreigners buy it - traders * Ringgit dips as election worries prompt dlr short-covering * Rupiah down on corp dlr demand, bond inflows limit (Adds text, updates prices) By Jongwoo Cheon SINGAPORE, Feb 15 The won ended its best week in 14 months on Friday as foreign investors continued to snap up South Korean stocks, leading weekly gains among emerging Asian currencies, as global investors looked to a meeting of G20 officials for further signals on foreign exchange policy. The won rose 1.6 percent against the dollar for the week, its largest percentage gain since the week ended Dec. 4, 2011, according to Thomson Reuters data. The Singapore dollar and the Philippine peso both looked set to rise 0.2 percent on the week, also buoyed by inflows. While growing concerns over upcoming general elections weighed on the Malaysian ringgit on Friday, it edged up 0.1 percent on the week. The Indonesian rupiah posted a similar performance. That came as the yen paused in its recent weak trend ahead of a a meeting of G20 finance ministers and central banks on Friday and Saturday in Moscow. Russia's Deputy Finance Minister Sergei Storchak said the passage on currencies in a G20 communique will not single out Japan's expansive policies, but officials are expected to spar over the moves, which have sharply and swiftly driven down the yen. Over the last two weeks, optimism over emerging Asian currencies has recovered, with investors rebuilding bullish bets on the won, a Reuters poll showed on Thursday. Still, investors say gains in regional units will be kept in check as the yen is expected to remain weak due to Japan's reflationary policies and deficits. "Regardless of the G20 meeting result, the yen will fall again as the market will focus on Japan's trade and current account deficits," said Yuna Park, a currency and bond analyst at Dongbu Securities in Seoul. "Other Asian currencies will follow, especially the ones of Japan's competitors, although the impact may be weaker on a few others, like the peso, which are less sensitive to Japan," Park added. Some emerging Asian currencies fell this year as a weaker yen bit into their export competitiveness in overseas markets. Regional authorities have expressed concern about the negative spillover effects from massive easing policies undertaken by several major central banks over the last year. Some Asian policymakers have warned of possible measures to stem their currency appreciation or better manage capital flows. Still, Japan is likely to keep pushing reflationary policies. Japan Prime Minister Shinzo Abe is close to selecting his nominee for central bank governor and the possible leading candidate may step up the Bank of Japan's monetary stimulus, sources said. "A new governor and the prospects of a weakening trend in place for the JPY will shape the direction of currencies," CIMB Investment Bank said in a note. "That said, for Asian units that have continued to hibernate in the early part of the year, a jolt in the form of a policy shift will likely see Asian units eventually caving in to the JPY weakness." WON The won touched 1,076.6 per dollar, its strongest since Jan. 25 on demand from offshore model accounts and exporters. It found more support from demand linked to foreign investors' stock purchases. Traders expected dollar supplies linked to ING's sale of a 5 percent stake in South Korea's KB Financial Group . Some speculated about dollar offers linked to the deal. The Dutch financial service group said it sold the shares for about $672 million to institutional investors. Traders in Seoul said the won may find more support as foreign investors take parts of the stake, with speculation that ING may have completed selling the won for repatriation. "We may see only dollar supplies from the deal, as ING may have already hedged," said a senior foreign bank dealer in Seoul. Technically, the won is seen having room to 1,075.3, a 55-day moving average. The next level would be 1,074.5, its low on Jan. 25. RINGGIT The ringgit slid as interbank speculators scrambled for dollars in thin trading on increasing caution over the upcoming election. Malaysian parliament will only be dissolved when all quarters, including the people, are ready for the polls, Prime Minister Najib Razak was quoted by national news agency Bernama. Najib also said: "very soon, very soon, do the job first, do not worry," when asked how close the dissolution of parliament was, according to Bernama. "Nobody will go home with short dollar/ringgit positions," said a Malaysian bank dealer in Kuala Lumpur, adding the ringgit may head to 3.1140 to the greenback, its low on Jan. 31 when the Malaysian currency suffered from bond outflows and selling from real money funds. That level was softest since Sept. 7 last year, but the ringgit showed signs of being excessively sold on Jan. 31 with dollar/ringgit's relative strength index (RSI) above the 70 threshold. The trader said investors were worried too much about the election. "The dollar/ringgit was up only due to election talks, nothing else. So, you need to be very careful with long dollar positions," the trader said. The trader said he will add dollar positions around 3.0900 but will not buy greenback more near 3.1000. Next week, domestic exporters may rush to buy the ringgit for settlements, traders said. RUPIAH The rupiah eased on dollar demand from local corporates with domestic banks buying the greenback around 9,660 per dollar, traders said. However, freign banks bought the rupiah near 9,680, which traders said was linked to bond inflows, limiting its downside, traders added. On Thursday, Indonesia's finance ministry raised 9.95 trillion rupiah ($1.03 billion) at a debt auction, higher than its indicative target of 7 trillion rupiah. The central bank took more steps to stabilise the rupiah. Bank Indonesia said on Thursday it ordered the suspension of export licenses of a number of small exporters who failed to report their foreign currency earnings. Still, investors remained worried about the country's current account deficits. "Foreign ownership of govies have improved in recent months but USD/IDR may remain dislocated from portfolio inflow developments pending the expected improvement in the current account," OCBC Bank said in a note, referring to the government bonds. CURRENCIES VS U.S. DOLLAR Change on the day at 0700 GMT Currency Latest bid Previous day Pct Move Japan yen 92.75 92.90 +0.16 Sing dlr 1.2358 1.2348 -0.08 *Taiwan dlr 29.725 29.750 +0.08 Korean won 1077.20 1083.80 +0.61 Baht 29.85 29.83 -0.07 Peso 40.61 40.64 +0.07 Rupiah 9660.00 9657.00 -0.03 Rupee 53.98 53.92 -0.12 Ringgit 3.0930 3.0900 -0.10 *Yuan 6.2325 6.2325 +0.00 Change so far in 2013 Currency Latest bid End prev year Pct Move Japan yen 92.75 86.79 -6.43 Sing dlr 1.2358 1.2219 -1.12 Taiwan dlr 29.725 29.136 -1.98 Korean won 1077.20 1070.60 -0.61 Baht 29.85 30.61 +2.55 Peso 40.61 41.05 +1.10 Rupiah 9660.00 9630.00 -0.31 Rupee 53.98 54.99 +1.87 Ringgit 3.0930 3.0580 -1.13 Yuan 6.2325 6.2303 -0.04 * Financial markets in China and Taiwan were closed for holidays. ($1 = 9659.5000 Indonesian rupiahs) (Additional reporting by Lee Kyoung-ho in SEOUL; Editing by Kim Coghill)
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