Japan's next prime minister, Shinzo Abe, on Monday again urged the central bank to ease policy, saying it should respect Sunday's election result which showed public support for his calls for more aggressive monetary stimulus. Yuna Park, a currency and bond analyst at Dongbu Securities in Seoul, said "Expectations for the BoJ's easing have been priced in to some degree. But once the BoJ acts, funds with low interest rates are likely to flow to emerging Asian markets."
The won hit 12.7343 to the yen, its strongest since April 11, 2011 and also gained against the dollar in subdued trading. But the South Korean unit gave up some of initial gains on caution over potential intervention by the foreign exchange authorities, dealers said. "The authorities are likely to step in the market strongly, although there are few factors to push down the won," said a South Korean bank dealer in Seoul.
The Philippine peso rose as interbank speculators bought it with most corporates seen having filled their dollar demand, dealers said. "They would save their bullets until we see 40.90-40.95," said a foreign bank dealer in Manila, referring to the peso's levels against the dollar. Remittances from Filipinos overseas in October grew 8.8 percent from a year ago to a record of $1.93 billion, central bank data showed. The peso touched 0.4869 to the Japanese currency.
The baht gained on demand from Japanese banks, although Thai importers bought dollars for payments, limiting the baht's upside, dealers said. The baht strengthened as much as 0.5 percent to 36.269 to the yen, its strongest since April 27, 2011. The Taiwan dollar advanced on exporters' demand for settlements in thin trading.
Investors, however, hesitated to chase the island's currency further, especially around 29.050 per US dollar on caution over potential steps by the central banks to check its appreciation. The Taiwan dollar hit 0.3443 to the yen, its strongest since April 13, 2011, but investors hesitated to push the local unit higher against the Japanese currency as Sunday's election result had been widely expected, dealers said. The Singapore dollar touched 1.4459 to the yen, its highest since May 2010.