Asian currency markets were restless on Monday as doubts swirled about the US dollar's global trend and over Japanese intervention to weaken the yen.
The Singapore dollar rose almost a cent, from Friday's three-month low of 1.7186, and the Korean won moved in a narrow range around 1,172 per dollar.
The baht was almost unchanged from Thursday's close around 39.45 as Thai markets opened after a long weekend.
The Thai economy grew a better than expected 2.7 percent in the fourth quarter of 2003, helping it to its biggest annual expansion in eight years, official data showed on Monday.
But, with the yen hitting a five-month low of 112.30 per dollar on Friday in New York, markets were taking no chances.
While the regionals had indeed parted ways with the yen's three-week fall versus the US dollar, analysts said there was a lingering risk that Japanese intervention to weaken the yen would continue, and eventually pull down regional currencies.
"Dollar/yen has to come down and so does dollar/Asia," said Bhanu Baweja, currency strategist with UBS.
"The only risk is that of BOJ intervention," he said, adding that buying the yen at this time could be likened to going against "a moving train."
The yen has shed over 3.6 percent of its value against the dollar in two weeks. In comparison, the won is up about a percent, the Taiwan dollar has lost over half a percent and the Singapore dollar is about 1.2 percent down in two weeks.
Traders said cross-currency trades, involving short positions in the yen against the regionals, were becoming too crowded and the ambiguity about the yen made things worse.
Markets were also confused about the US dollar's direction in major markets after Friday's surprisingly weak US jobs data and some comments from European policymakers appreciating the dollar's rebound versus European currencies.
While the US dollar climbed against the yen in the face of the jobs data, it fell against other major currencies like the euro, Swiss franc and sterling.
Elsewhere, the Philippine peso moved in a tight 56.32-56.35 per dollar band. It was supported at the 56.35 record low by suspicion the central bank was defending the currency as political uncertainty continued to hurt sentiment. The Indonesian rupiah recovered gradually in opening deals, crossing over from the weaker side of 8,600 to the dollar.
Baweja said he would place bets on a rally in the rupiah against the dollar, by buying rupiah in the offshore forwards.
Bank Indonesia had defended the rupiah from falling past 8,600, and hence they might not confuse markets by buying dollars too at those levels, he said.
"Given BI's greater FX reserves ammunition compared to recent years, and the high probability of a near-term turn in dollar/yen, we see value in selling near-dated dollar/rupiah non-deliverable forwards," he said.
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