* IDR bonds expected to remain highly sought-after - analyst
* Economic recovery and more stimulus hopes help Asia FX
gain
* S. Korea unveils supplementary budget to fight virus
crisis
(Adds text, updates prices)
By Shriya Ramakrishnan
June 3 (Reuters) - The Indonesian rupiah hit a near
three-month high on Wednesday as strong demand from
yield-seeking investors extended a rally in government bonds,
while most other Asian currencies gained on hopes of more
stimulus and a global economic recovery.
Bank Indonesia sees room for further rupiah appreciation,
said Governor Perry Warjiyo, adding investors were more
confident about Southeast Asia's largest economy because of
prudent fiscal and monetary policies. The rupiah IDR= climbed 1.4% to 14,180 against the dollar
as investors piled into government debt, sending yields on the
benchmark 10-year bond ID10YT=RR down by 5 basis points to
7.177%, the lowest since mid-March.
On Tuesday, the finance ministry raised 24.35 trillion
rupiah ($1.71 billion) in its first government bond auction
since the Eid al-Fitr holidays, which was more than four times
oversubscribed. "IDR bonds are expected to remain highly sought-after,
considering the dearth of yields across the fixed-income
landscape," said Han Tan, a market analyst at Cyprus-based
trading and investing firm FXTM.
"USD/IDR could return into the sub-14,000 territory on
sustained fund inflows, aided by high real rate differentials
and steady recovery in domestic and global economic conditions,
provided that the dollar continues its downward trajectory."
A gradual reopening of several regional economies, including
Singapore, Thailand, India and the Philippines, has supported
risk sentiment this week despite looming risks such as a second
wave of coronavirus infections and simmering Sino-U.S. tensions.
The Singapore dollar SGD= and the Taiwan dollar TWD=TP
firmed 0.2% and 0.3% respectively, while the Chinese yuan
CNY=CFXS inched down in onshore trade.
A private survey earlier showed China's services sector
returned to growth last month for the first time since January,
although employment and overseas demand remained weak.
"It's tempting to see mainland China as a template for the
rest of the world for how quickly activity can bounce back. In
truth, the jury is still out on whether everyone else can follow
the same path," analysts at HSBC cautioned, referring to a
continued weakness in manufacturing activity across the region.
The South Korean won KRW=KFTC strengthened 0.7% to a more
than three-week high, while higher crude prices supported the
currency of Malaysia MYR=MY , a net exporter of the commodity.
South Korea unveiled a 35.3 trillion won ($28.8 billion)
supplementary budget aimed at lifting Asia's fourth-largest
economy, which is facing its worst growth since the 1998 Asian
financial crisis. The Indian rupee INR=IN rose 0.4% to 75.03 per dollar
before giving up some gains.
Financial markets in Thailand were closed for a holiday.
CURRENCIES VS U.S. DOLLAR
Change on the day at
0519 GMT
Currency Latest bid Previous Pct
day Move
Japan yen 108.480 108.66 +0.17
Sing dlr 1.397 1.4002 +0.24
Taiwan dlr 29.893 29.988 +0.32
Korean won 1217.400 1225.4 +0.66
Peso 50.150 50.17 +0.04
Rupiah 14180.000 14380 +1.41
Rupee 75.260 75.36 +0.14
Ringgit 4.258 4.272 +0.33
Yuan 7.111 7.1045 -0.10
Change so far in 2020
Currency Latest bid End 2019 Pct
Move
Japan yen 108.480 108.61 +0.12
Sing dlr 1.397 1.3444 -3.75
Taiwan dlr 29.893 30.106 +0.71
Korean won 1217.400 1156.40 -5.01
Peso 50.150 50.65 +1.00
Rupiah 14180.000 13880 -2.12
Rupee 75.260 71.38 -5.16
Ringgit 4.258 4.0890 -3.97
Yuan 7.111 6.9632 -2.08
($1 = 14,200.0000 rupiah)