* BoJ, Fed, RBA stand ready to ease policies if necessary
* China factory activity in Feb seen to be bottom - analyst
* Interactive graphic tracking global spread of coronavirus:
open
https://tmsnrt.rs/3aIRuz7 in an external browser
(Adds text, updates prices)
By Nikhil Nainan
March 2 (Reuters) - Most Asian currencies firmed on Monday
as hopes grew for a coordinated monetary policy response by
major central banks to tackle the economic impact from the rapid
spread of coronavirus, sending investors in the direction of
emerging assets.
Reminiscent of the 2008 global financial crisis, central
banks, including the U.S. Federal Reserve and the Bank of Japan
chimed in with assurances that they would take action to support
economies if necessary. Federal Reserve Chair Jerome Powell said on Friday the
central bank will "act as appropriate", and investors are
pricing in a 0.25 percentage point cut at its next scheduled
meeting on March 17-18. The dollar .DXY was 0.2% weaker.
Earlier, money had poured into U.S. Treasuries, sending the
implied yield on U.S. 10-Year Treasury futures below 1% for the
first time though it has since recovered.
The euro EUR= was up 0.2%, while the yen JPY= last stood
0.2% weaker.
Offering the first glimpse into the impact of the virus
outbreak in China, factory activity contracted at the fastest
pace on record last month. China's yuan CNY=CFXS , however, gained 0.3%, with some
market participants saying the contraction was unlikely to get
worse as production and supply slowly get back to normal.
"Unlike a demand-driven shock during the global financial
crisis, when the market was unsure about the trajectory of the
recovery, it is almost certain that February will mark the
bottom for this year," OCBC said in a note, citing easing
restrictions on supply-side factors.
With markets now looking to central banks for a response,
Julian Wee, an investment strategist at Credit Suisse, said
lower risk aversion was seeing long positions on the dollar
reduce.
"Ultimately, it will have to be an ebbing of the threat from
Covid-19 that will provide an enduring floor for EM FX and Asia
FX in particular," Wee said.
The South Korean won KRW=KFTC strengthened 1.3% to its
highest level against the dollar in nearly two weeks.
A private survey showed factory activity shrank faster in
February, as export orders contracted at the quickest pace in
more than six years. Indonesia's rupiah IDR= fell 0.5% against the dollar,
after posting its biggest weekly loss since 2008 amid foreign
money outflows.
The central bank said it was adopting "triple intervention"
- its term for operations in the domestic non-deliverable
forward, spot foreign exchange and bond markets, while the head
of the Financial Services Authority urged investors to remain
calm amid the outflows.
Yields on Indonesia's 10-year bonds ticked higher to 7.047%
from 6.966% at the open. Malaysia's ringgit MYR= advanced 0.3%, with market
participants keeping a close watch on political developments as
Mahathir Mohamad promised to seek a vote in parliament to
challenge Muhyiddin Yassin's assent to prime minister on Sunday.
The Thai baht THB=TH strengthened 0.7%, while the
Philippine peso PHP= was up 0.3%.
CURRENCIES VS U.S. DOLLAR AS AT 0445 GMT
Currency Latest bid Previous day Pct Move
Japan yen 108.060 108.07 +0.01
Sing dlr 1.391 1.3929 +0.17
Taiwan dlr 30.092 30.330 +0.79
Korean won 1198.200 1213.7 +1.29
Baht 31.320 31.54 +0.70
Peso 50.830 50.96 +0.26
Rupiah 14415.000 14340 -0.52
Rupee 72.255 72.22 -0.05
Ringgit 4.200 4.211 +0.26
Yuan 6.971 6.9910 +0.29
Change so far in 2020
Currency Latest bid End 2019 Pct Move
Japan yen 108.060 108.61 +0.51
Sing dlr 1.391 1.3444 -3.32
Taiwan dlr 30.092 30.106 +0.05
Korean won 1198.200 1156.40 -3.49
Baht 31.320 29.91 -4.50
Peso 50.830 50.65 -0.35
Rupiah 14415.000 13880 -3.71
Rupee 72.255 71.38 -1.21
Ringgit 4.200 4.0890 -2.64
Yuan 6.971 6.9632 -0.11