Firm BoJ rate buzz pulls yen down

ASIAN CURRENCIES ROUND-UP

The yen declined against all the 16 most active currencies on speculation that Bank of Japan Governor Toshihiko Fukui will signal plans to delay raising the interest rates, which are the lowest among major economies.

Japan's currency fell for a second day against the dollar and euro after JPMorgan Chase, the third largest US bank, predicted the BOJ will delay a rate increase until the fourth quarter. The economic and fiscal policy minister Hiroko Ota told a press briefing in Tokyo that energy costs and a US slowdown were risks to the economy. Fukui speaks in Paris later today.

Japan's currency dropped to 161.02 a euro as of 7:57 am in London from 160.42 yesterday in New York. It touched 159.76 on January 3, the highest in more than a month. The yen fell to 109.35 a dollar compared with 109.18. It may touch 112 this quarter, Kraft forecast.

Asian currencies rose against the dollar, with Malaysia's ringgit reaching the strongest since November 1997, as the region's stocks climbed for the first time in four days. The ringgit rose 0.3 per cent 3.2730 a dollar and the South Korean won added 0.1 per cent to 939.30. The MSCI Asia Pacific Index of shares added 0.3 per cent, following a three-day, 3.4 per cent drop.

China's yuan fell, slipping from the strongest since it scrapped a peg to the dollar in 2005, on speculation the central bank is seeking to deter investors betting on further gains. The yuan fell 0.07 per cent to 7.2740 a dollar as of 12:07 pm in Shanghai, according to the China Foreign Exchange Trade System.

Ringgit, peso climb on growth outlook Malaysia's ringgit reaching the strongest since November 1997, on speculation overseas investors will buy the region's equities.

The currency added to two weeks of gains as the Kuala Lumpur Composite Index of shares climbed to a record. Asian stocks advanced on optimism that US President George W. Bush will announce a package to revive growth in the world's biggest economy.

"We are still seeing inflows into the stock market, so people will continue to buy some non-dollar currencies,'' said Nor Alfian Din, head of the Asian currency unit in Kuala Lumpur at Malayan Banking, Malaysia's biggest lender.

The ringgit rose 0.3 per cent to 3.2720 a US dollar as of 4:06 pm in Kuala Lumpur, versus 3.2815 late yesterday, according to data compiled by Bloomberg. The currency has gained 1 per cent this year, the second best performer in Southeast Asia after the Thai baht.

The Kuala Lumpur Composite Index of stocks advanced 2.8 per cent. Malaysia's economy expanded 6.7 per cent in the third quarter from a year earlier, the fastest pace in three years. The government has forecast fourth quarter growth to match that and predicted the economy grew around 6 per cent in 2007.

The South Korean won added 0.1 per cent to close at 939.30, the Singapore dollar gained 0.2 per cent to S$1.4323 and the Thai baht advanced 0.2 per cent to 33.29 in onshore trading. The MSCI Asia Pacific Index of shares added 0.1 per cent, following a three-day, 3.4 per cent drop.