May 30, 2018 / 5:24 AM / a month ago

EM ASIA FX-Most Asian currencies hit by sell-off over Italy; Indonesia cbank eyed

    * China's yuan at lowest since Jan 18
    * Indonesian rupiah flat, awaits cbank decision 
    * Philippine peso at lowest since July 2006

 (Adds text, updates prices)
    By Susan Mathew
    May 30 (Reuters) - Most Asian currencies fell on Monday,
with the Philippine peso weakening to its lowest in nearly 12
years, as Italy's deepening political crisis triggered a
sell-off in global markets, rocked  the euro and aided the
    Risk-off sentiment prevailed as investors feared repeat
elections in the euro zone's third-largest economy - which could
come as soon as July - may be a de-facto referendum on Italian
membership of the currency bloc and Italy's role in the European
Union. Italy has searched for a government since inconclusive
March elections.
    This took the euro to 10-month lows, and helped the
greenback stay steady at 94,844 at 0446 GMT.
    Among regional currencies, the Philippine peso hit
its lowest since July 2006.
    Souring Sino-U.S. relations added to investor woes as it
rekindled trade-war fears after China expressed surprise and
said it was ready to fight back at the White House's decision to
go ahead with the $50 billion worth of tariffs on Chinese
imports, unless Beijing addresses the issue of theft of American
intellectual property.
    This development came after the two sides agreed earlier
this month to look at steps to narrow the U.S. trade deficit
with China, and days ahead of a visit to the Chinese capital by
U.S. Commerce Secretary Wilbur Ross for further talks.

    The Chinese yuan was at its lowest since
mid-January at 6.427 per dollar after breaching the
psychologically important 6.4 level on Tuesday. The central bank
lowered the yuan midpoint for a fifth straight day on Wednesday
to the weakest level in 4-1/2 months.
    The South Korean won slipped for a second
session. The latest development, of a top North Korean official
heading to New York for talks with the U.S secretary of state,
affirmed possibilities of a summit between leaders of the two
    The Malaysian ringgit continued its fall after a
market holiday on Tuesday, weakening to its lowest in 4-1/2
    "The Malaysian ringgit will continue to be in the no-trade
zone for foreign investors who were showing little appetite for
Malaysia bond and equities prior the Italian meltdown and are
even more unlikely to do so with the risk aversion gripping
market," Stephen Innes, head of Asia-Pacific trading for Oanda,
said in a note.
    "And one look at the technical overlay on oil prices should
reinforce that view." 
    Bearing bad news for Malaysia, a net exporter of oil, prices
fell on Wednesday on supply glut concerns.
    The Thai baht lost the most among regional
currencies, down 0.4 percent. April manufacturing data was
broadly in-line with expectations, and did not cheer investors
amid the broader sell-off.
    The Indonesian rupiah was flat as its central bank
held an off-cycle meeting at which it is expected to raise
interest rate for the second time in two weeks. 
    Bank Indonesia (BI) earlier this month hiked the benchmark
rate by 25 basis points in an attempt to support the weakening
currency and curb capital outflows.
    BI Governor Perry Warjiyo said the meeting was a pre-emptive
stance ahead of the U.S. Federal Reserve's June meeting. The Fed
is expected to then raise rates.
    "Though capital outflows from the region seemed to be a bit
stretched relative to fundamentals, we would not rule out the
probability that BI could tighten again this year should
volatility resurface," Mizuho Bank said in a note.

 Change on the day at 0446 GMT                   
 Currency              Latest bid  Previous day  Pct Move
 Japan yen             108.600     108.75        +0.14
 Sing dlr              1.345       1.3457        +0.09
 Taiwan dlr            30.036      29.988        -0.16
 Korean won            1080.600    1076.8        -0.35
 Baht                  32.140      32.01         -0.40
 Peso                  52.685      52.647        -0.07
 Rupiah                14000.000   13985         -0.11
 Rupee                 67.780      67.86         +0.12
 Ringgit               3.993       3.98          -0.33
 Yuan                  6.426       6.4150        -0.17
 Change so far in                                
 Currency              Latest bid  End 2017      Pct Move
 Japan yen             108.600     112.67        +3.75
 Sing dlr              1.345       1.3373        -0.54
 Taiwan dlr            30.036      29.848        -0.63
 Korean won            1080.600    1070.50       -0.93
 Baht                  32.140      32.58         +1.37
 Peso                  52.685      49.977        -5.14
 Rupiah                14000.000   13565         -3.11
 Rupee                 67.780      63.87         -5.77
 Ringgit               3.993       4.0440        +1.28
 Yuan                  6.426       6.5069        +1.26

 (Reporting by Susan Mathew in Bengaluru; Editing by Richard
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