By Jaskiran Singh
January 18 (Reuters) – Emerging Asian currencies came under pressure on Wednesday, with the Thai baht emerging as the biggest loser after Japan’s central bank, the world’s third largest economy, stuck to ultra-low interest rates.
Thai baht THB = TH It weakened as much as 0.6% during the session, while the Malaysian ringgit Malaysian Ringgit = It fell 0.3%, marking losses for the second consecutive session.
Bank of Japan (BOJ) introduced no the changes to ultra-low interest rates at the end of the two-day meeting, ending days of market speculation that the central bank may phase out its massive stimulus program in the wake of rising inflationary pressures.
After the news from the Bank of Japan, the US dollar rose Nearly 2% against the yen, the biggest one-day percentage jump since June 17, adding pressure to emerging Asian currencies.
Christopher Wong, currency analyst at OCBC, said that the weakness of the yen after the Bank of Japan’s decision could affect Asian currencies in the short term.
“Expectations remain that the BoJ will normalize policy by moving away from yield curve control or exit negative interest rate policy as inflationary pressure shifts to a broader base and is seen to be trending higher,” he said.
In the near term, the yen’s weakness may spill over into other Asian currencies, particularly the South Korean won.
Chinese yuan CNY = CFXS The South Korean won fell 0.2%. KRW = KFTC The Philippine peso fell 0.5%. PHP = It emerged as the only outlier in the region, gaining 0.2%.
Singapore dollar Singapore dollar = It fell 0.3%, tracking its worst day in nearly two weeks.
“The medium-term outlook for the Singapore dollar centers around potential further tightening from the Monetary Authority of Singapore and any further developments that may arise from China’s reopening,” analysts at Maybank said.
The city-state said the international arrivals last year exceeded It predicted a full recovery in tourism by next year to pre-pandemic levels, when China was the largest contributor of tourists.
Equities in emerging Asia were mixed, with shares in Seoul .KS11 Down about 0.8% as investors Reservation Profits ahead of the results of the major companies.
Stocks in Singapore STI Rose 0.4% and the Philippines .PSI Its shares rose 0.3 percent, while shares in Jakarta rose .JKSE decreased 0.6%. Stocks in Shanghai .SSEC not changed.
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Asian stock and currency indices at 0406 GMT
daily forex %
FX YTD %
% daily stock
Stocks to date %
Japanese yen =
CNY = CFXS
INR = IN
Malaysian Ringgit =
KRW = KFTC
Singapore dollar =
TWD = TP
THB = TH
Graph: World forex rates https://tmsnrt.rs/2RBWI5E
Asian stock marketshttps://tmsnrt.rs/2zpUAr4
(Reporting by Jaskiran Singh in Bengaluru; Editing by Edmund Kelman)
The views and opinions expressed herein are those of the author and do not necessarily reflect the views and opinions of Nasdaq, Inc.