April 2, 2019 / 5:08 AM / 2 months ago

EM ASIA FX-Asian currencies slip on higher U.S. bond yields, oil prices

    * Stronger dollar, bond yields steer funds away from Asia 
    * Indian rupee, Philippine peso dented by oil import costs
    * South Korean won weakens as inflation rate slows

 (Adds details, updates prices)
    By Ambar Warrick
    April 2 (Reuters) - Emerging Asian currencies softened on
Tuesday as optimism over the U.S. economy, along with a rise in
the dollar and bond yields, increased investor interest in
developed markets.  
    Currencies of countries with hefty oil imports, such as the
Indian rupee, Philippine peso and Indonesian
rupiah, were also hurt by crude prices reaching a 2019
    Asian markets had strengthened on Monday after encouraging
China factory surveys hinted that domestic stimulus easing some
of the pressure from its trade war with the U.S. Overnight, an
uptick in American manufacturing data saw U.S. bond yields and
the dollar move higher.
    Mizuho Bank's Vishnu Varathan said in a note that the
positive data "helped to assuage fears of a deep recession."  
    But he took a cautionary tone, adding "the trouble with
silver linings is that the clouds have yet to lift, even if bets
mount on the sunshine behind. So EM Asia optimism may be
measured, not manic."
    At 0455 GMT Tuesday, the Chinese yuan was down
about 0.12 percent to the dollar. The People's Bank of China set
a slightly weaker mid-point for the day, compared to Monday's
close. The yuan has gained about 2.3 percent this year.
    The Indonesian rupiah weakened 0.11 percent against the
dollar. While a spike in oil prices usually hurts the rupiah,
given the country's large oil bill, there has been encouraging
economic data recently, including February's surprise trade
surplus and a March inflation rate below the Indonesian central
bank's target. 
    The South Korean won declined 0.29 percent versus
the  dollar, as inflation for March slowed to its weakest pace
since July 2016.
    South Korea's central bank chief on Monday clarified that it
was not in a hurry to ease policy further, contrary to
expectations in the bond market.
    Oil prices were spurred by demand prospects and
supply disruptions to their highest since November 2018.
    The Indian rupee fell about 0.20 percent and the
Philippine peso declined 0.25 percent.
    Both currencies are especially sensitive to oil prices given
their vast current account deficits, a large portion of which
comes from oil imports. 
    Voting in Indian elections begins this month and a budget
impasse in the Philippines are expected to weigh on the
respective currencies in the near-term. 
    The following table shows rates for Asian currencies against
the dollar as at 0455 GMT.
 Change on the day at   0455 GMT                  
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              111.340     111.34        +0.00
 Sing dlr               1.356       1.3545        -0.09
 Taiwan dlr             30.842      30.801        -0.13
 Korean won             1137.000    1133.7        -0.29
 Baht                   31.750      31.71         -0.13
 Peso                   52.500      52.37         -0.25
 Rupiah                 14235.000   14220         -0.11
 Rupee                  69.290      69.15         -0.20
 Ringgit                4.082       4.079         -0.07
 Yuan                   6.721       6.7125        -0.12
 Change so far in 2019                            
 Currency               Latest bid  End 2018      Pct Move
 Japan yen              111.340     109.56        -1.60
 Sing dlr               1.356       1.3627        +0.52
 Taiwan dlr             30.842      30.733        -0.35
 Korean won             1137.000    1115.70       -1.87
 Baht                   31.750      32.55         +2.52
 Peso                   52.500      52.47         -0.06
 Rupiah                 14235.000   14375         +0.98
 Rupee                  69.290      69.77         +0.69
 Ringgit                4.082       4.1300        +1.18
 Yuan                   6.721       6.8730        +2.26
 (Reporting by Ambar Warrick in Bengaluru; Editing by Richard
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