June 25, 2018 / 6:14 AM / a month ago

EM ASIA FX-Trade war concerns weigh on region; S.Korean won drops most

    * Indonesian rupiah falls as May imports jump 28.1 pct
    * China's yuan slips; PBOC loosened banks' reserve
requirements on
Sunday
    * Singapore headline inflation for May higher than expected

 (Adds text, updates prices)
    By Aaron Saldanha
    June 25 (Reuters) - Emerging market currencies in Asia
weakened on Monday as a reported U.S. government plan to curb
Chinese investment in U.S. tech companies weighed heavily on
risk sentiment. 
    Asian equities retreated and Treasury bond yields declined
after the Wall Street Journal said the U.S. government was
drafting rules that would block firms with at least 25 percent
Chinese ownership from buying U.S. companies involved in
"industrially significant technology".
    "Sino-US trade tensions will continue to weigh on Asian
currencies this week. Note that the next salvo is expected to be
restrictions on Chinese investments in the United States 
(expected by Friday)," OCBC Bank's Terence Wu said in a note on
Monday.
    "Asian currencies are more reactive to USD strength this
time round, compared to the late April – May period. We think
this may be due to the close deadlines on the trade tension
front, and the lack of stability emanating from the RMB
(yuan)complex." 
    China's yuan fell as much as 0.61 percent to its
lowest against the dollar in more than 5 1/2 months.
    The People's Bank of China said on Sunday it would cut the
level of cash reserves that some banks must hold by 0.5 percent,
releasing $108 billion in liquidity.
    The move is aimed at accelerating the pace of
debt-for-equity swaps to ease relatively tight liquidity
conditions as Chinese authorities bear down on excessive
debt.
    Despite the loosening of reserve requirements, the yuan was
not the biggest loser on Monday, with South Korea's won
 touching a level last seen in mid-November.
    The won was 0.8 percent weaker on Monday. South Korea's
export-oriented economy leaves it vulnerable to global trade
disruptions.  
    Singapore's dollar was 0.34 weaker with data out 
on Monday showing inflation quickened in May.
    The headline consumer price index for the city-state rose a
higher-than-expected 0.4 percent in May from a year
earlier.
    The Indian rupee weakened 0.39 percent against the
dollar, on track to fall for the first time in four sessions.
    The Philippine peso lost about 0.31 percent. 
       
    INDONESIAN RUPIAH
    The Indonesian rupiah fell 0.48 percent against the
dollar after data from the country's statistics bureau showed a
28.1 percent jump in imports in May, influenced by higher oil
prices, leading to a $1.52 billion trade deficit.
    The large spurt in imports overshadowed a 12.5 percent rise
in exports over the same period.
    
    CURRENCIES VS U.S. DOLLAR
The following table shows rates for Asian currencies against the
dollar at 0511 GMT.
    
 Change on day at 0511 GMT                                      
  Currency                   Latest bid   Previous day  Pct Move
  Japan yen                  109.430            109.96     +0.48
  Sing dlr                   1.363              1.3580     -0.34
  Taiwan dlr                 30.377             30.307     -0.23
  Korean won                 1116.300           1107.4     -0.80
  Baht                       32.990              32.89     -0.30
  Peso                       53.384             53.217     -0.31
  Rupiah                     14143.000           14075     -0.48
  Rupee                      68.100              67.84     -0.39
  Ringgit                    4.012               4.001     -0.27
  Yuan                       6.532              6.4950     -0.57
                                                                
  Change so far in 2018                                         
  Currency                   Latest bid  End 2017       Pct Move
  Japan yen                  109.430            112.67     +2.96
  Sing dlr                   1.363              1.3373     -1.86
  Taiwan dlr                 30.377             29.848     -1.74
  Korean won                 1116.300          1070.50     -4.10
  Baht                       32.990              32.58     -1.24
  Peso                       53.384              49.93     -6.47
  Rupiah                     14143.000           13565     -4.09
  Rupee                      68.100              63.87     -6.21
  Ringgit                    4.012              4.0440     +0.80
  Yuan                       6.532              6.5069     -0.39
 
 (Reporting by Aaron Saldanha in Bengaluru
Editing by Eric Meijer)
  
 
 
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