The South Korean won led the gains, climbing roughly 1.2 percent against the dollar, and pulling away from a trough hit earlier this week on worries about geopolitical risks after North Korean leader Kim Jong-il's death. The Singapore dollar edged up against the greenback. The US currency dipped 0.5 percent to 1.2921 and slipped below support around 1.2940 to 1.2950, roughly where a trendline drawn off the US dollar's lows in late October and early December now sits. The rise in Asian currencies came after data the previous day showed German business sentiment rose sharply in December, defying expectations for a decline, while US housing starts and building permits jumped to a 1-1/2 year high in November. One caveat is that their gains took place in thin year-end trading. Market players remain cautious about the outlook for Asian currencies in coming months due to concerns about the impact of the euro zone's debt crisis on Asian economies and the potential for fund repatriation out of Asia. "Europe could still continue to drive the volatility in Asian currencies," said Perry Kojodjojo, FX strategist for HSBC in Hong Kong, referring to the outlook for Asian currencies in 2012. Another focal point is whether there will be any easing in dollar funding conditions, he added. A Singapore-based trader of non-deliverable forwards said flows in NDFs were very light on Wednesday, with activity limited to trading by model funds and some proprietary traders. The NDF trader said market players might take a wait-and-see stance toward Asian currencies in the first half of 2012 as they assess the impact of the euro zone's debt crisis on China and other Asian economies. "I think a hard-landing scenario for China has receded, but many market players are wondering whether China's GDP growth might dip below 8 percent," the trader said. "If things continue the way they are, I think the main scenario may turn out to be dollar buying versus Asian currencies," he said, adding that Asian currencies may struggle unless the Chinese yuan appreciates. As things stand now, market players are bracing for the possibility of some yuan weakness in 2012. Benchmark offshore one-year dollar/yuan non-deliverable forwards (NDFs) have largely been forecasting yuan depreciation in a year's time since late September, reversing a trend of appreciation since the yuan's revaluation in July 2005. INDONESIAN RUPIAH The Indonesian rupiah bucked the broad rise in emerging Asian currencies and fell 0.9 percent. The rupiah had been a laggard as well the previous day, when foreign funds were said to have off-loaded longer-term Indonesian bonds. Data on ownership of tradeable government securities in Indonesia released earlier this week shows that foreign investors have recently trimmed their Indonesian bond holdings. Foreign investors reduced their holdings to 221.49 trillion rupiah as of Monday, down from 223.71 trillion rupiah last Friday, according to the finance ministry data. Still, while foreign ownership of Indonesian bonds has declined compared with levels in July and August of around 250 trillion rupiah, it is up for the year. At the end of 2010, it was 195.76 trillion rupiah.