Asian currencies rose sharply on Monday, notching up fresh multi-year highs as a broadly soft dollar slumped to an 8-month low against the yen.
The latest dollar sell-off followed weaker-than-expected US jobs data on Friday and a comment from US Treasury Under-secretary Timothy Adams last week that suggested Japanese policy-makers should avoid intervening verbally on currencies.
Dealers said the comment was seen as a signal that Washington wants the dollar to weaken against the currencies of countries that have a large trade surplus with the United States, especially those in Asia, to help fix global economic imbalances.
The Malaysian ringgit extended gains to a new 8-year high of 3.5930 per dollar and the Indonesian rupiah rose almost 0.75 percent to a 2-year peak of 8,722 per dollar.
The Taiwan dollar jumped 0.9 percent to a 10-month high of 31.37 per US dollar, while the Singapore dollar set a 8-1/2-year peak at 1.5623 per US dollar.
South Korea's won added more than one percent to an 8-1/2-year high at about 927 per US dollar, with dealers saying further gains were capped by wariness about central bank intervention to curb the won's strength.
"The gains in Asian currency markets are partly a story about the dollar, which is weak against everything, especially the yen," said Callum Henderson, head of currency strategy at Standard Chartered.
"It is also an Asian story - the regional economic recovery is broadening, stock inflows are strong and expectations are for further Asia rate increases not just a pause in Fed rate hikes."
The yen shot up more than 1 percent from levels seen in late Asian trade on Friday to an 8-month high against the dollar at about 111.16.
Dealers said the Singapore dollar was also bolstered by a decisive win for Singapore's People's Action Party (PAP) in national elections on Saturday.
"There is general dollar weakness today, but also strong fund buying of the Sing dollar and it looks like the market is trying to push it to 1.55," said a trader in Singapore.
"The election victory is also adding to a bit of strength as the PAP won about 65 percent of the vote."
The PAP, which has ruled Singapore for four decades, won two thirds of the votes cast, down from three quarters in the 2001 poll, but still seen as a strong mandate. It held on to 82 seats in the 84-seat parliament.
The Thai baht showed little immediate reaction to a ruling on Monday by Thailand's Constitutional Court that the inconclusive April 2 general election was unconstitutional and a new poll should be held.
"The ruling hasn't had a big impact but it is a good factor for the baht because if we have new elections it will cut political uncertainty," said a Bangkok-based trader.
Analysts at DBS Bank said any gains in the yuan this week, ahead of a report from the US Treasury that could name China as a currency manipulator, could further boost Asian currencies.
The US Treasury report is due this week although the day of release has not been specified.
"A gap below the psychological 8 level in dollar/yuan should reinforce the view for further Asian currency appreciation to address global imbalances," they said in a note.