Factory activity in the United States, China and Germany grew in January, raising hopes that the world's economy is not deteriorating as seriously as feared before. Greece is nearing a long-awaited bond swap deal to prevent a chaotic default with its private creditors, while some European sovereign yields fell on optimism that the crisis won't deepen. While those developments may spur some foreign money into Asia, the size of investments may be smaller than January, as investors will continue to exercise caution until the crisis is decisively resolved, analysts and dealers said. Still, a sustained appetite for emerging Asian assets will keep supporting the regional currencies, they added. "We will see more inflows to Asia, although the size may be smaller than January, with some still cautious. It is time to buy emerging Asian currencies on dips despite their recent sharp rises," said Chris Lee, managing director of Samsung Asset Management in Singapore. Lee said last year's underperformers such as the Indian rupee would benefit from those inflows, adding that the market may experience "a revenge of losers." The rupee's 7.45 percent January gain followed a 16 percent drop in 2011, making it Asia's worst performer for the year, on foreign outflows and growing concerns about the current account deficit. Saktiandi Supaat, head of FX Research at Maybank in Singapore, said real money investors -- such as pension and mutual funds -- may invest in emerging Asian currencies on some level of strong domestic demand within the region. However, some regional units may some corrections as some of them are technically seen excessively bought and on caution over intervention by central banks, dealers and analysts said. Corrections may provide chances to buy the regional units on dips, some dealers said. "As long as the euro is strong, we stay short dollar/Asia," said a senior dealer at a Malaysian bank in Kuala Lumpur. "Risk appetite is getting better every day and money has nowhere to go, except Asia. They will come to Asian equities." TAIWAN DOLLAR Foreign sovereign funds and Taiwanese insurers sold US dollar/Taiwan dollar non-deliverable forwards (NDFs) , while inflows from foreign institutional investors pushed down US dollar/Taiwan dollar spot, dealers said. The one-month NDF and the spot rate both hit a 4-1/2 month low. But the island's central bank was spotted buying US dollar in the spot market to slow the local unit's slide and importers joined the bids, they added. Dealers said the spot may head to 29.40 once the 29.50 support is broken. WON Dollar/won hit a 2-1/2 month low on selling from offshore funds and as foreign investors continued to buy Seoul stocks. Traders said the South Korean foreign exchange authorities were not spotted buying the pair to contain its slide. The pair slipped 0.8 percent to 1,117.3, the lowest since Nov. 14. It is seen having room to slide more, probably to 1,115.8, the 76.4 percent Fibonacci retracement of its October-December rise. If the retracement is cleared, it may head to 1,109-1,110, around the low of Nov. 4 and a 200- day moving average. Its 14-day Relative Strength Index (RSI) is still above the 30 threshold, indicating it is not in an oversold territory yet. But market players stayed wary of possible intervention and importers bought the pair on dips, limiting the dollar/won's slide. Another brake on the pair's downside was dollar demand that dealers suspected was linked to Lone Star's sale of a stake in Korea Exchange Bank to Hana Financial group. Foreign investors bought a net 990.5 billion Korean won ($879.35 million) in Seoul stocks, becoming net buyers for a third straight session. RINGGIT Dollar/ringgit slid to a 4-1/2 month low and is seen testing the 3.00 support level although the market appeared to short dollar. "The pair should test below 3.00 in the next two weeks. The market is short, but risk sentiment is firm now," said a Malaysian bank dealer in Kuala Lumpur. The pair has support at 2.9983, the 76.4 percent Fibonacci retracement level of its July-October rise.