Asian currencies were steady on Tuesday as the market paused to take stock after sharp gains over the past week. The Indian rupee was little moved at around 45 per dollar after the Reserve Bank of India lifted its short-term repurchase rate by a quarter of a point to 7.25 percent but left all its other policy rates unchanged.
Most of the regionals had opened lower as the yen fell on soft Japanese economic data that cast doubt on whether Japan would be able to raise interest rates again this year.
But a comment by the Bank of Japan that it would gradually adjust rates based on economic and price conditions lent the yen - and in turn other Asian currencies - some support.
"We are seeing consolidation at what are pretty high levels overall for Asian FX," said Westpac Bank currency strategist Sean Callow. "There have been no big moves today, but most currencies are close to strong levels and sentiment is still positive."
The South Korean won was the day's best performer, climbing a quarter of a percent to about 942 per dollar, its strongest in about five weeks. Other regional currencies held near recent peaks. The Singapore dollar was steady at about 1.5615 per US dollar, within sight of Friday's nine-year high at 1.5580.
The Thai baht was also little changed, having pared early falls. It stood at about 36.70 to the dollar, close to Monday's seven-year peak at about 36.66. Suspected central bank intervention briefly weighed on the baht.
"It is possible that they (the central bank) intervened, maybe below 36.70," a trader in Bangkok said. The Philippine peso was up marginally at 49.79 per dollar close to a more than four-year high hit on Monday at 49.73, while the Indonesian rupiah was marginally weaker at about 9,111 to the dollar.
"The numbers coming out of Asia are not that bad, so all in all markets are positive towards Asian currencies, but they are also watching stocks and US data," said Thio Chin Loo, a currency strategist at BNP Paribas.
Easing oil prices were also seen as a good sign for regional currencies. Oil steadied below $59 a barrel on Tuesday after falling almost 4 percent on Monday. "Given that high crude oil prices have been the primary negative influence on regional balance of payments positions, this news is positive, especially as the lower price is linked to weather factors rather than signs of global growth weakness," ABN Amro analysts said in a note.
India's central bank was in focus after its rate move. Some analysts said the decision to raise the repurchase rate while keeping the key reverse repo rate unchanged suggested the Reserve Bank of India was concerned about inflation but did not want to keep lifting interest rates as it could hurt the economy.
Shahab Jalinoos, a currency strategist at ABN Amro, said that, with the policy change posing little threat to Indian equities, the rupee could test the 44.80 level against the dollar. "The main risk to the rupee now is an externally driven move away from risky assets rather than a negative market reaction to today's policy decision," he said in a note.
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