The Taiwan dollar gained on Tuesday as foreign investors increased purchases of local shares on optimism about the island's economies and company earnings. Taiwan dollar strengthened a quarter of a percent to 31.58 per dollar, inching closer to a four-year high of 31.50 reached in December. The Singapore dollar gained a quarter percent on expectations the Singapore authorities would tolerate a stronger currency.
Foreign investors have bought net $1.02 billion of Taiwanese shares this year, data from Nomura International showed Tuesday. That was more than what they bought in other Asian stock markets such as India, South Korea, the Philippines and Indonesia during the period.
"Taiwan dollar remains well supported," said Claudio Piron, a currency strategist at J.P. Morgan Chase Bank, in a note to clients, referring to the strong inflows through Taiwan's stock market.
The Taiwan currency was also buoyed by strong exports, which surged a higher-than-expected 29.7 percent in the year through January, the fastest growth in eight months.
The Singapore dollar gained on expectation the Monetary Authority of Singapore would let the under-performing currency strengthen in line with its tightening bias. The Singapore dollar is the worst-performing Asian currency this year apart from the Indian rupee.
The Singapore dollar was also buoyed by expectations of fund inflows from a Malaysian purchase of shipping assets in Singapore, Piron said.
The Philippine peso recovered from a 0.9 percent drop in early trade after Monday's bomb blasts in Manila's business district and two southern cities unsettled some investors.
The peso closed a quarter of a percent lower at 54.70 per dollar after falling to a low of 55.05 in the early morning.
The Philippine benchmark stock index recouped all its losses after falling as much as 2 percent in early trading.
The impact on investor sentiment is likely to be short-lived, said Sani Hamid, a currency analyst at 4CAST Ltd in Singapore. "People are holding their bids till things settle down," he said.
Monday's blasts, which killed at least 11, came at a time when foreigners were increasing investments in Philippine stocks and companies.
The peso has gained 3 percent against the dollar this year, making it Asia's best-performing currency.
The South Korean won fell a fifth of a percent to about 1026.60 per dollar after the Bank of Korea left its benchmark overnight call rate target unchanged at a record low of 3.25 percent on Tuesday. The central bank has cut rates four times since the middle of 2003.
After the decision, the South Korean central bank said domestic consumption was showing signs of a mild recovery in some sectors although an improvement in capital spending was weaker than had been initially expected.
The yen was steady at about 105 per dollar as traders waited for US data on capital flows for December, due later Tuesday, to see how the world's largest economy was financing its record current account deficit.
Also, US Federal Reserve Chairman Alan Greenspan was due to testify to the Congress on Wednesday and Thursday. He could give indications on the likely pace of increase in US interest rates this year.
The US dollar has rallied against the euro and the yen since the start of this year on expectations the Fed may raise benchmark rates faster than analysts expected last year.
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