Yen advances, yuan drops to one-week low

ASIAN CURRENCIES ROUND-UP

The yen rose against the dollar and euro after comments from the US Treasury Secretary Henry Paulson failed to revive credit-market confidence, prompting traders to sell higher-yielding assets bought with loans from Japan.

The yen was the best performer of the 16 most-active traded currencies after equity markets in Europe and Asia fell and US stock-index futures slipped. Paulson said he had no "silver bullet" to stop sub-prime mortgage losses from spreading. The Japanese currency fell the most against the Australian and Canadian dollars.

The yen rose to 161.49 per euro at 11:11 a.m. in London, from 162.01 late yesterday. It traded at 109.72 per dollar, from 110.46. The euro rose to $1.4712, from $1.4667.

China's yuan traded near the lowest in more than a week on speculation the government will raise interest rates and banks' reserves while preventing the currency from rising too fast.

The currency fell the past two days after Ma Kai, who heads the country's top economic planning body, said at the weekend that China will use monetary policy controls to temper inflation that was a decade high in October.

The currency was at 7.3985 per dollar as of 5:30 p.m. in Shanghai, from 7.4025 late yesterday, according to the China Foreign Exchange Trade System.

The Philippine peso had the highest close in 7 1/2 years on speculation the bulk of money sent home by Filipinos abroad for the Christmas season hasn't yet arrived.

"Remittances will pour in in the next few weeks and that is helping the peso's strength," said Fitz Aclan, who helps manage the equivalent of $5.9 billion at BDO Unibank in Manila.

Money sent from abroad accounts for about a 10th of the $117 billion Southeast Asian economy and has helped the peso gain almost 16 per cent versus the US currency this year. The currency climbed 0.4 per cent to 42.12 per dollar at 4 p.m. close of onshore trading, according to Tullett Prebon Plc, the world's second-largest inter-dealer broker. That was the highest close since May 2000.

Malaysia's ringgit rose for a fourth day after a government report today showed exports grew faster than economists expected.

The currency kept gains as traders bet the US Federal Reserve will lower its key interest rate next week to avert a recession after a private report showed manufacturing grew in November at the slowest pace in 10 months. Malaysia ships one- fifth of its goods to the US, its biggest overseas market.