(Adds text, updates prices)
By Rushil Dutta
May 22 Most Asian currencies edged higher on
Monday, supported by a slight return in risk appetite though
investors remained wary of the ongoing political turmoil in
Asian investors were assessing renewed tensions in the
Korean peninsula after North Korea fired a ballistic missile
into waters off its east coast on Sunday, but most were taking
the North's second missile test in a week in their stride.
The South Korean won, traditionally sensitive to
North Korea's antics, rose nearly 1 percent against the dollar
, which hovered near six-month lows.
"This week's initial momentum seems to be risk-on, that is
going to be supportive of Asian currencies," said Vishnu
Varathan, a senior economist at Mizuho Bank.
"While investors are quite wary of a lot of risks out there,
they seem to be looking past them. This is also turning out to
be slightly positive for equity market sentiments, which seem to
be coming out of the safe-haven mode."
Asian stocks excluding Japan posted their
biggest intra-day gain in close to a month.
Markets may seek consolation from the FOMC minutes due on
Wednesday, which may potentially slightly lift U.S. Treasury
yields, Varathan added.
U.S. Treasury yields fell to near one-month lows on Friday
as investors worried that allegations against U.S. President
Donald Trump would disrupt his plans to cut taxes and increase
Investors are also eyeing the OPEC meeting on Thursday with
the oil cartel and other producers on course to agree on
extending supply cuts by a further nine months until next March.
The Singapore dollar and Thai baht, fell
about 0.2 percent and 0.3 percent, respectively, tracking
weakness in the Japanese yen, which was about 0.2 percent
A Reuters poll showed Singapore's consumer price index in
April probably rose 0.7 percent from a year earlier, unchanged
from the previous month's pace. The inflation numbers are due on
The CPI numbers, however, are not likely to shift the
central bank's neutral policy stance.
UPGRADE BOOSTS RUPIAH
The rupiah continued its upward momentum,
recovering from earlier losses on Friday after rating agency
Standard & Poor's (S&P) upgraded Indonesia's sovereign ratings
to investment grade.
S&P's move was long awaited and came after Fitch upgraded
Indonesia to investment grade in December 2011 and Moody's in
"Unanimous IG ratings (is) opening up Indonesian assets to
institutional investors who had earlier been bound by IG
mandate. And so this upgrade may still prompt "reactionary" or
pent-up allocation into Indonesian equities and bonds," Mizuho
Bank said in a note.
As of Friday, foreign net buying in Indonesian stocks stood
at 28 trillion rupiah ($2.11 billion), compared with 16.2
trillion rupiah in all of last year.
INFLOWS LIFT TAIWAN DOLLAR
The Taiwan dollar rose to its highest in nearly
three weeks, up 0.6 percent against the dollar to 30.019, on the
back of continued foreign fund flows.
The Taiwan dollar has risen about 7.5 percent so far this
year, the second biggest gainer in the region after the Korean
won, which has added 8.1 percent.
In March, Taiwan's central bank had refrained from
intervention to weaken the Taiwan dollar, fearful of being
labelled a currency manipulator by Trump.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0523 GMT
Currency Latest bid Previous day Pct Move
Japan yen 111.460 111.26 -0.18
Sing dlr 1.387 1.3847 -0.19
Taiwan dlr 30.019 30.210 +0.64
Korean won 1116.900 1127.2 +0.92
Baht 34.350 34.259 -0.26
Peso 49.755 49.87 +0.23
Rupiah 13300.000 13330 +0.23
Rupee 64.503 64.64 +0.21
Ringgit 4.306 4.32 +0.33
Yuan 6.890 6.8870 -0.04
Change so far
Currency Latest bid End 2016 Pct Move
Japan yen 111.460 117.07 +5.03
Sing dlr 1.387 1.4490 +4.44
Taiwan dlr 30.019 32.279 +7.53
Korean won 1116.900 1207.70 +8.13
Baht 34.350 35.80 +4.22
Peso 49.755 49.72 -0.07
Rupiah 13300.000 13470 +1.28
Rupee 64.503 67.92 +5.30
Ringgit 4.306 4.4845 +4.15
Yuan 6.890 6.9467 +0.82
(Reporting by Rushil Dutta in Bengaluru; Editing by Jacqueline