Asian currencies were largely steady on Thursday, supported by a rally in the yen, but mostly sticking to familiar ranges and waiting for fresh direction.
Dealers said the market was reluctant to take on big positions before Friday's key United States jobs report, while holidays in China and South Korea added to subdued trading activity.
The Thai baht was steady at about 37.60 per dollar, shrugging off comments from Bank of Thailand Governor Pridiyathorn Devakula that the central bank would intervene if the baht rose too quickly. The Indonesian rupiah held steady at about 9,200 per dollar after Bank Indonesia delivered its fifth interest rate cut of the year, as expected.
The key rate was lowered by half a percentage point to 10.75 percent and the central bank said there was room for further cuts. "The decision was priced into the market and the central bank is expected to keep cutting rates to 9.75-10 percent by year end," said a Jakarta trader.
"Bonds continue to rally but it's not that significant for the rupiah - the correlation between the two is not that strong anymore and most buyers of debt are local players."
The yen rose about 0.4 percent to around 117.55 yen per dollar and bounced back from Wednesday's one-month lows versus the euro. DBS Bank currency strategist Philip Wee said the yen was due for a relief rally, which could spill over into Asian currencies.
"This has to do with falling oil prices and also an improving outlook for Japan's economy," he said. Oil prices have fallen sharply this week and held below $60 a barrel on Thursday. A pull-back in oil prices from record highs set in July is seen as positive for Asian currencies as much of the region imports the bulk of its oil needs.
Wee said the Malaysian ringgit and Taiwan dollar was two Asian currencies that could benefit the most from a further recovery in the yen. The yen has been hurt in recent weeks as investors dump the low-yielding currency for higher-yielding ones.
The Taiwan dollar firmed to 33.08 per United States dollar, off this week's nine-month lows at about 33.17, while the ringgit firmed about 0.1 percent to 3.6850 to the United States dollar.
A comment by Malaysian central bank chief Zeti Akhtar Aziz on Thursday that a stronger ringgit will reinforce monetary policy helped support the currency. But she added that the authorities had other policy instruments to deal with inflation. The prospect of rate cuts meanwhile was in focus in the Philippines after the country's central bank said on Wednesday it will discuss the possibility of such a move at its next policy meeting in November.
Philippine consumer prices in September rose 5.7 percent from a year ago, slowing from a 6.3 percent increase in August. Some traders said they suspected the Philippine central bank intervened in the market on Thursday to keep the peso on the weak side of 50 per dollar.
"It seems like 50 is the line in the sand for now and peso upside could slow for the time being," said Dresdner Kleinwort Asia currency strategist Sabrina Jacobs. The peso has risen about 7 percent since late June, hitting its highest level in more than four years earlier this week.
"The prospect of a rate cut could put some pressure on the peso short-term," said a Manila trader. "But it depends on the magnitude of the move and the medium-term outlook is still positive.