By Jongwoo Cheon
SINGAPORE (Reuters) - The South Korean won led gains among emerging Asian currencies on Wednesday, helped by tentative signs of stability in developing markets but risk sentiment remained fragile ahead of U.S. payrolls data later this week.
Indonesia's rupiah gained on better-than-expected fourth-quarter growth and inflows for a government bond auction later in the day.
The won and the Malaysian ringgit advanced on short-covering.
Most regional currencies, however, gave up earlier gains as investors were worried about a potentially poor reading in the U.S. nonfarm payrolls data for January.
The Philippine peso turned weaker on worries over the sustained acceleration in the country's inflation. Consumer prices in January rose 4.2 percent from a year earlier, as expected, the highest since November 2011.
"It looks better to add short positions in Asian currencies as disappointing U.S. jobs data could spur risk aversion when China is facing problems such as a slowing economy," said Yuna Park, currency and bond analyst at Dongbu Securities in Seoul.
More From This Section
"Few investors will hold Asian assets as sluggish economies in both the U.S. and China will hit emerging market."
U.S. nonfarm payrolls are expected to have increased by 185,000 in January, a Reuters poll showed, compared with 74,000 in December.
Ahead of the jobs data, the ADP reading on private hiring is due later on Wednesday, and any disappointment will likely drag on sentiment.
WON
The won rose as investors covered short positions amid a rise in Seoul shares.
The South Korean currency, however, pared much of its earlier gains on dollar demand from importers.
Foreign investors also kept selling local stocks, causing expectations of more dollar bids linked to the sale, traders said.
"The market seems to prefer a correction to 1,080 to further gains," said a South Korean bank trader in Seoul, referring to the won's value against the dollar.
"It is key for the won if there is further stop-loss dollar selling by offshore funds, but they took a breather."
RINGGIT
The ringgit advanced, tracking its strength in overnight non-deliverable forwards.
Some investors took profits from long positions in the Singapore dollar to the ringgit.
Still, local interbank speculators hesitated to chase the ringgit, saying risk sentiment remained fragile.
"It is hard to say if the risk rebound will last," said a senior Malaysian bank trader in Kuala Lumpur.
RUPIAH
The rupiah rose as data showed Indonesia's economy grew a faster-than-expected 5.72 percent in the fourth quarter from a year earlier.
Joint venture banks, which foreign and local lenders set up, bought it ahead of a government bond sale later in the day.
"The data may support the rupiah further, probably to 12,150," said a Jakarta-based trader, referring to the rupiah's value to the dollar.
"I also heard positive sentiment as well for today's bond auction," the trader added.
The official Jakarta Interbank Spot Dollar Rate (JISDOR), which the central bank launched last year in an effort to manage exchange rate fluctuations, was fixed at 12,172 rupiah per dollar, stronger than the prior session's 12,248.
Local importers bought dollars for payments, limiting its upside, traders said.
* Financial markets in China are closed for holidays.
(Additional reporting by Yena Park in SEOUL; Editing by Jacqueline Wong)