Yen falls for 7th day in a row

ASIAN CURRENCIES ROUND-UP

The yen fell for a seventh day against the euro and weakened versus the dollar. The Japanese currency declined 0.1 per cent to 107.93 a dollar by 10:23 am in London. It traded at 158.74 a euro, from 158.71 yesterday in New York.

The yuan rose for a fifth day after China's central bank pledged new policies and increased currency flexibility to curb the fastest inflation in 11 years.

The currency rose to the highest since a link to the US dollar ended in July 2005 after the People's Bank of China said in a five-year plan released yesterday that it will "innovate'' to address problems including growth in money supply. Global commodity prices surged to a record yesterday, as oil jumped above $100 a barrel and copper rallied.

"The constant message is the need to mop up excess liquidity,'' said Dwyfor Evans, a strategist with State Street Global Markets in Hong Kong. "Commodity prices are also a threat. So they will need currency strength as an offset.''

The yuan advanced 0.2 per cent to 7.1436 a dollar as of the 5:30 pm close in Shanghai, from 7.1580 yesterday, according to China Foreign Exchange Trade System. The currency gained 2.2 per cent this year after rising about 7 per cent in 2007.

Consumer prices rose 7.1 per cent from a year ago in January, the statistics bureau said yesterday. Accelerating inflation adds to evidence the world's fastest-growing major economy is at risk of overheating. The nation's trade surplus rose more than forecast in January and money supply grew at the quickest pace in 20 months.

Asian currencies fell, led by Indonesia's rupiah, on concern record crude oil prices will spur companies to demand more dollars to pay for imports.

The currency snapped a six-day gain after oil prices reached a record $100.1 a barrel yesterday, increasing costs for state-owned PT Pertamina and other buyers. Seven of the 10 most actively traded currencies outside of Japan weakened today, including the Philippine peso and South Korea's won.

"There has been some corporate demand for dollars, some for oil purchases,'' said Dian, a currency trader at PT Bank Internasional Indonesia in Jakarta, who uses only one name. "That's weakening the rupiah.''

The rupiah fell to 9,190 a dollar as of 3:51 pm in Jakarta from 9,160 late yesterday, according to data compiled by Bloomberg. The currency reached 9,130 on February 18, the highest since November.

Crude oil for March delivery was $98.98 a barrel in after- hours trading on the New York Mercantile Exchange, after gaining 40 per cent in the past six months.

The Korean won declined as local stocks slumped on speculation the advance in oil prices will slow the nation's economic growth and fan inflation.

The Korean currency has lost 1.1 per cent this year, the worst performer among the 10 most traded currencies in the Asia- Pacific region. Lehman Brothers Holdings this week cut its 2008 growth forecast for Korea to 4.3 per cent from an earlier estimate of 4.6 per cent. The Kospi index fell 1.9 per cent, ending two days of gains.