April 23, 2018 / 7:08 AM / a year ago

EM ASIA FX-Most Asian currencies weaken as rising U.S. yields bolster dollar

    * Indonesian rupiah hits lowest level in over 2 yrs
    * Yuan sole gainer in region

 (Adds text, updates prices)
    By Chris Thomas
    April 23 (Reuters) - Most emerging Asian currencies slipped
on Monday as rising U.S. bond yields buoyed the dollar, a move
that particularly hurt sentiment toward countries where foreign
investors have large domestic bond holdings.
     The dollar's index against a basket of six major peers rose
as much as 0.2 percent to 90.447.
    "This was expected to happen given the markets' intense
focus on U.S. yields, especially 10-year yields, which ratcheted
higher," said Stephen Innes, head of trading APAC at Oanda.
    U.S. 10-year Treasury yield touched a peak of 2.979 percent
, the highest since January 2014, adding to gains
made last week after Federal Reserve officials signalled further
interest rate increases in 2018 thanks to evidence of steady
U.S. growth.
    The Indonesian rupiah slipped 0.1 percent to its
weakest since January 2016.
    "Rising U.S. bond yields triggered the drop in the rupiah.
It's one area in the region that's totally exposed - most of the
bonds are owned by foreign investors," said Innes.
    Foreigners held 39 percent of Indonesian government bonds at
the end of March, data from Bank Indonesia showed.
    Innes also said recent oil prices, which had hit multi-year
highs, also added to bearishness in large segments of the Asian
market and could hurt currencies of oil importing countries,
such as India and the Philippines.
    The Philippine peso, the worst performing currency in
the region so far this year, was 0.2 percent weaker. 
    The Indian rupee fell as much as 0.2 percent to its
lowest level since March 2017, and was headed for its sixth
straight session of declines.
    The rupee fell 0.5 percent on Friday while Indian bond
yields spiked after the minutes of the monetary policy panel
meeting suggested that they were likely to take a more hawkish
tone starting as early as June.
    The Thai baht slipped 0.3 percent, while the South
Korean won was 0.2 percent weaker. 
    Data showed Thailand's customs-cleared annual exports
increased at a slower pace in March compared with the previous
month, due partly to a high comparative base last year, and the
growth was slightly below forecast.
    The Chinese yuan was the only gainer in the
region, up 0.1 percent.
    However, Innes said a further pick up in the dollar could
see even the yuan weaken off "considerably".
    The Taiwan dollar lost 0.3 percent to hit its
weakest level since mid-Jan.
    "There's negative outlook in the semiconductor area," said
    "We've seen the Apple stock wobble a little bit, so that's
playing negatively into the tech sector."
    The Taiwan SE Weighted Index was down 0.8 percent at
close, weighed down by the information technology sector.

    The following table shows rates for Asian currencies against
the dollar at 0604 GMT.
 Currency                     Latest bid  Previous day  Pct Move
 Japan yen                    107.790     107.65        -0.13
 Sing dlr                     1.317       1.3161        -0.07
 Taiwan dlr                   29.495      29.407        -0.30
 Korean won                   1069.000    1067.3        -0.16
 Baht                         31.420      31.31         -0.35
 Peso                         52.133      52.095        -0.07
 Rupiah                       13890.000   13875         -0.11
 Rupee                        66.205      66.12         -0.13
 Ringgit                      3.896       3.895         -0.03
 Yuan                         6.295       6.2976        +0.04
 Change so far in 2018                                  
 Currency                     Latest bid  End 2017      Pct Move
 Japan yen                    107.790     112.67        +4.53
 Sing dlr                     1.317       1.3373        +1.54
 Taiwan dlr                   29.495      29.848        +1.20
 Korean won                   1069.000    1070.50       +0.14
 Baht                         31.420      32.58         +3.69
 Peso                         52.133      49.93         -4.23
 Rupiah                       13890.000   13565         -2.34
 Rupee                        66.205      63.87         -3.53
 Ringgit                      3.896       4.0440        +3.80
 Yuan                         6.295       6.5069        +3.37
 (Reporting by Chris Thomas in Bengaluru; Editing by Sam Holmes)
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