Asian currencies pare losses

Asia currencies cut earlier losses on Thursday as regional stock markets stabilised, while the hard-hit Indonesia rupiah also found support as investors started to buy back the high-yielding currency. The rupiah bounced back and steadied at 8,885 per dollar after slipping to a one-month low at 8,945 per dollar.
"It's just over-bought condition (for the dollar) in the morning has created some long unwinding in the afternoon. Now the market has started to rally back," said a trader in Jakarta. Indonesia's central bank cut its benchmark interest rate by 25 basis points to 8.50 percent on Thursday - the 12th cut since early last year - in line with market expectations.
The South Korean won bounced back to 926.6 per dollar in line with the Seoul's stock market, after dipping to a one-week low at 929.5 per dollar. The Malaysian ringgit was down about 0.4 percent at 3.427 per dollar after falling as far as 3.4385 per dollar, its weakest level since mid-April.
A trader in Kuala Lumpur said he believed domestic companies were buying the dollar, taking over from foreign investors that took profit from the ringgit's recent rises in the past sessions.
"I think 3.45 will be the true resistance level," he said. Longer term, the ringgit was still in an up trend and could strengthen to 3.3 per dollar by the end of the year, supported by the country's improving economic fundamentals as government spending picks up, Standard Chartered said in note to clients.
The Philippine peso steadied near 46 per dollar. The Thai baht fell a quarter of a percent to about 34.6 per dollar, while the Singapore dollar fell slightly to 1.532 per US dollar.
Most Asian stocks bounced back into positive territory after suffering early losses due to worries about inflation and higher interest rates in the United States, Asia's top export market. The MSCI's index of regional shares outside Japan was virtually flat after suffering losses in early trade.
"Investors are trying to move a little bit of risk off the table in response to falling equities and high yields," said Ben Simpfendorfer, currency strategist at Royal Bank of Scotland. "We don't think this sell-off will be sustained," he said.
US data on Wednesday showed productivity grew at a slower pace than initially estimated in the first quarter and higher labour costs reinforced concerns about inflation.