February 9, 2018 / 6:17 AM / 6 months ago

EM ASIA FX-Global equity turmoil weighs on most Asian currencies

    * Bond yield spike concerns hit regional sentiment
    * China's yuan set for first weekly decline in 9 weeks
    * Philippine peso weakens for fifth straight week

 (Adds text, updates prices)
    By Aaron Saldanha
    Feb 9 (Reuters) - Most Asian currencies weakened against the
U.S. dollar on Friday 
as regional equity markets were hit by a fresh wave of selling
and investors retreated from riskier assets globally.
    Another plunge in U.S. stocks overnight, triggered by a jump
in bond yields and fears of sharper interest rate rises, left
Asian markets in a sea of red.
    "The issue is not so much the 3 percent level (of U.S
benchmark bond yields) but rather the pace that bond yields have
been rising in the U.S. that is sending the markets into
disarray," said Stephen Innes, head of trading for Asia Pacific
at OANDA in a note.
    "The rapidity of the moves has caught the markets by
surprise, and we are going through the predictable panicked
repricing of most asset classes."
    Benchmark 10-year note yields rose as high as
2.884 percent on Thursday, nearing a four-year high.
    Worsening risk sentiment and higher volatility also means
many market players are now being forced to close their existing
positions rather than making new bets.
    The re-rating of assets has had repercussions across Asia as
the MSCI's broadest index of Asia-Pacific shares outside Japan
 dropped 2.3 percent to a two-month low.

    South Korea's won was 0.3 percent weaker against
the dollar as the country's benchmark equity index
touched its lowest in the day since September 2017.
    The Malaysian ringgit shed 0.3 percent as factory
output in December rose at a much slower pace than anticipated
by a Reuters poll.
    The Singapore dollar repeated Thursday's performance
as it slipped 0.1 percent as equities lost as much as 2.2
    Meanwhile, the Indian rupee was 0.2 percent weaker,
weakening for the second straight week. 
    Only the Thai baht firmed in the region, by a
marginal 0.1 percent. Thailand is due to report data on its
foreign exchange reserves later in the day.
    The Philippine peso was hit the hardest in the
region as it weakened 0.6 percent with the main stock index
 sliding as much as 2.6 percent.
    The currency saw its the worst day since June, 2016, on
Friday. Trade data for December 2017 ensured the full-year trade
deficit widened to a record as imports for the year jumped 10.2
    Bangko Sentral ng Pilipinas, Philippine's central bank, held
interest rates steady on Thursday and poured cold water on
expectations that it will hike this year.    
    China's yuan weakened 0.2 percent against the
dollar as equity markets sank.  
    The benchmark Shanghai Composite Index tumbled as
much as 5.9 percent at one point to a nine-month low before
recouping some losses, while the blue-chip CSI300
dived as much as 6.2 percent.
    China's central bank said on Friday it has released
temporary liquidity worth almost 2 trillion yuan ($316.28
billion) to satisfy cash demand before the long Lunar New Year
    The following table shows rates for Asian currencies against
the dollar at 0515 GMT.
   Change on the day at 0515 GMT                              
  Currency                         Latest bid  Previous    Pct
                                                    day   Move
  Japan yen                        108.890       108.74  -0.14
  Sing dlr                         1.332         1.3310  -0.10
  Taiwan dlr                       29.401        29.390  -0.04
  Korean won                       1091.100      1087.9  -0.29
  Baht                             31.820         31.85  +0.09
  Peso                             51.600         51.31  -0.56
  Rupiah                           13645.000      13600  -0.33
  Rupee                            64.360         64.26  -0.16
  Ringgit                          3.937         3.9245  -0.32
  Yuan                             6.329         6.3185  -0.17
  Change so far                                               
  Currency                         Latest bid  End 2017    Pct
  Japan yen                        108.890       112.67  +3.47
  Sing dlr                         1.332         1.3373  +0.38
  Taiwan dlr                       29.401        29.848  +1.52
  Korean won                       1091.100     1070.50  -1.89
  Baht                             31.820         32.58  +2.39
  Peso                             51.600         49.93  -3.24
  Rupiah                           13645.000      13565  -0.59
  Rupee                            64.360         63.87  -0.76
  Ringgit                          3.937         4.0440  +2.72
  Yuan                             6.329         6.5069  +2.81

 (Reporting by Aaron Saldanha in Bengaluru)
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