SINGAPORE: Emerging Asian currencies rose on Wednesday as disappointing US jobs data cemented expectations that the Federal Reserve will hold off from paring its stimulus at least until early 2014.
The South Korean won hit a nine-month high, nearing its peak this year, on sustained stock inflows.
The Malaysian ringgit advanced on short-covering, while Indonesia’s rupiah touched a near five-week high after a strong bond sale.
Regional share-prices also rose as US nonfarm payrolls increased by 148,000 workers in September, less than expected. While the employment gain in August was revised up, the July figure was revised down to the weakest since June 2012.
The data implied the world’s biggest economy was losing stream before the US government shutdown for more than two weeks.
After the indicator, a majority of US primary dealers said the Fed would not start trimming its bond-buying programme until March of next year, a Reuters poll showed.
"The net impact is going to be Asian currency-supportive, as it will push out market pricing for a taper into potentially the late stages of Q1 after a hopeful resolution to the US
government’s fiscal difficulties," Scotiabank said in a client note.
"We will have to be much less bearish on the space over the coming four months, at least until clearer signals from the Fed and its policy trajectory are present."
The won rose as much as 0.6 per cent to 1,055.0 per dollar, its strongest since January 18 on demand from offshore funds.
Foreign investors were set to extend their buying streak in Seoul’s main stock exchange to a record 39th session.
Still, investors hesitated to push the South Korean currency above this year’s high of 1,054.5 on growing caution over possible intervention by the foreign exchange authorities.
Local importers bought dollars on dips for payments and some traders took profits from the won.
The local unit is seen having resistance lines at the 2013 peak and also at 1,048.9, its high of 2011.
"It may test this year’s high next week if exporters’ month-end deals intensify," said a senior foreign bank trader in Seoul.
"But we may see aggressive intervention when the won loses momentum," said the trader, adding that an end of foreign stock inflows could trigger such official dollar purchases.
The ringgit advanced as investors covered bearish positions and three-year government bond yield slid to 3.125 per cent, the lowest since June 10.
However, the Malaysian currency gave up some of its earlier gains as local traders took profits around the session high of 3.1410 per dollar.
It has a chart resistance at 3.1396, a 200-day moving average. The ringgit has been weaker than the average since late May.
Investors were also awaiting Malaysia’s 2014 budget, to be announced on Friday.
The rupiah gained as much as 0.5 per cent and reached 11,235 per dollar, its strongest since September 19 as Indonesian shares outperformed most regional peers and Indonesia sold more government bonds than targeted.
On Tuesday, the country sold 12 trillion rupiah (US$1.1 billion) of government bonds, more than the indicative target of 8 trillion rupiah.
Wednesday’s gain for Indonesia’s currency was later pared to 0.3 per cent on month-end dollar demand from domestic companies.-- Reuters