South Korea’s won led gains in Asian currencies this week amid speculation the region’s policymakers would refrain from reining in exchange rates before a meeting of the G20 nations.
The Bloomberg-JPMorgan Asia Dollar Index had its first weekly advance in a month as a draft statement obtained by Bloomberg News showed G20 leaders would reaffirm a pledge to avoid competitive devaluation at a meeting that began in Moscow on Friday.
The yen, which had advanced in Asian trading, fell after a G20 official said there is not a plan to echo a G7 promise to avoid using policies to target exchange rates.
“We are unlikely to see any strong action from Korea or other Asian central banks before the G20 meeting,” said Roy Teo, a currency strategist at ABN Amro Bank NV in Singapore.
“The impact of yen weakness on Asian economies is likely to be relatively muted” because of the rise of China as one of the top markets for the region’s exports, he said.
The won strengthened 1.6 percent this week to 1,078.20 per dollar in Seoul, according to data compiled by Bloomberg. Malaysia’s ringgit advanced 0.7 percent to 3.0780 and the Philippine peso rose 0.2 percent to 40.602.
Markets in China and Taiwan were closed this week for the Lunar New Year holiday.
On the Taipei spot market on Feb. 8, the New Taiwan dollar had dropped 0.3 percent to NT$29.75 against its US counterpart from a week before, according to prices from Taipei Forex Inc.
It was at its weakest level since Sept. 11 last year before markets closed for the Lunar New Year break.
Taiwan’s central bank has sold the local currency near the close on most days in the past 10 months, according to traders who asked not to be identified.
The Asia Dollar Index, which tracks the region’s 10 most active currencies excluding the yen, climbed 0.1 percent in the first five-day advance since the period ended on Jan. 18.
The gauge touched a three-month low on Tuesday after Ha Sung-keun, a Bank of Korea board member, said on Jan. 28 that a global currency war seems to be breaking out as monetary easing in Japan drags the yen lower.
Elsewhere, Indonesia’s rupiah was little changed from a week ago at 9,670 per US dollar and the Thai baht declined 0.2 percent to 29.86.