* Taiwan dollar touches highest level in nearly 19 months
* China bond yields up as PBOC raises short-term rates; yuan
* Most Asia FX on track for weekly gains as dollar falters
* U.S. nonfarm payrolls due later on Friday
(Adds text, updates prices)
SINGAPORE, Feb 3 The Taiwan dollar set a
19-month high on Friday and most Asian currencies were on track
for weekly gains as worries about U.S. President Donald Trump's
policy priorities helped weigh on the greenback.
The Taiwan dollar breached the key 31.00 per U.S. dollar
level and reached a high of 30.950 at one point, its
strongest level since July 2015.
Gains in the Taiwan dollar have been driven by recent U.S.
dollar weakness and net buying by foreign investors in domestic
stocks, analysts say.
"It's just general (U.S.) dollar weakness," said Sean
Yokota, head of Asia strategy for Scandinavian bank SEB in
"I think that we're still going to get (U.S.) dollar
strength, especially heading into second quarter. I prefer still
to be long dollars versus Taiwan," Yokota added.
Selling the Taiwan dollar can be a way to hedge against the
risk of increasing trade tensions between the United States and
Asia, he said.
China's yuan firmed in the first day of onshore
trade after a week-long break for the Lunar New Year as the
central bank surprisingly raised short-term interest rates -
piling pressure on the bond market.
The People's Bank of China raised the interest rate on open
market operation reverse repurchase agreements (repos) by 10
The move reinforced views that Chinese authorities are
intent on both containing capital outflows and reining in risks
to the financial system created by years of debt-fueled
Most emerging Asian currencies were on track for weekly
gains, after the greenback retreated amid worries that U.S.
President Donald Trump may be focusing more on trade
protectionism than reflationary fiscal policies.
The dollar has also come under pressure after Trump and
trade adviser Peter Navarro recently criticised Germany, Japan
and China, saying the three key U.S. trading partners were
engaged in devaluing their currencies to U.S. disadvantage.
While the dollar could get a boost if U.S. jobs data due
later on Friday comes in stronger than expected, such a bounce
may prove short-lived, said a trader for a Malaysian bank in
"U.S. dollar is on a downtrend because Trump wants a lower
U.S. dollar," the trader said.
Some analysts, however, say the dollar will probably regain
strength against Asian currencies once Trump unveils details of
fiscal stimulus, with the greenback also seen likely to benefit
from expected rises in U.S. interest rates this year.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0544 GMT
Currency Latest bid Previous Pct Move
Japan yen 113.04 112.81 -0.20
Sing dlr 1.4123 1.4114 -0.06
Taiwan dlr 31.040 31.101 +0.20
Korean won 1146.80 1146.80 +0.00
Baht 35.09 35.06 -0.07
Peso 49.795 49.755 -0.08
Rupiah 13345 13350 +0.04
Rupee 67.39 67.37 -0.03
Ringgit 4.4230 4.4220 -0.02
Yuan 6.8692 6.8807 +0.17
Change so far
Currency Latest bid End prev Pct Move
Japan yen 113.04 117.07 +3.57
Sing dlr 1.4123 1.4490 +2.60
Taiwan dlr 31.040 32.279 +3.99
Korean won 1146.80 1207.70 +5.31
Baht 35.09 35.80 +2.05
Peso 49.80 49.72 -0.15
Rupiah 13345 13470 +0.94
Rupee 67.39 67.92 +0.79
Ringgit 4.4230 4.4845 +1.39
Yuan 6.8692 6.9467 +1.13
(Reporting by Masayuki Kitano in SINGAPORE; Additional
reporting by J.R. Wu in TAIPEI, Winni Zhou and Elias Glenn in
SHANGHAI; Editing by Kim Coghill)