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Increase in US rates will also upsurge the refinancing risks of the external debt components of the country’s debt/FILE


Dollar firms in Asia as crisis hit Thailand’s baht slips

 Dollar firms in Asia as crisis hit Thailand's baht slips/AFP

Dollar firms in Asia as crisis hit Thailand’s baht slips/AFP

TOKYO, May 20- The dollar rose against the yen in Asia on Tuesday as investors await clues about future US and Japanese monetary policy, while the Thai baht slipped after the army declared martial law in the crisis-hit nation.

In Tokyo afternoon trading, the greenback fetched 101.52 yen, up from 101.45 yen in New York Monday afternoon.

The euro was hardly changed at $1.3710 from $1.3709 in US trade while rising to 139.18 yen against 139.13 yen in US trade.

Investors are focusing on the Bank of Japan’s two day board meeting, which wraps up Wednesday. While it is expected to end with no movement on monetary policy, traders will be closely following remarks by BoJ chief Haruhiko Kuroda.

The central bank head has previously said the BoJ would not hesitate to loosen policy if necessary.

However, if Kuroda emphasises an upbeat view on the world’s third-largest economy, “the market will likely interpret (that) as a signal he will allow a stronger yen and weaker stock market,” said Osamu Takashima, chief FX strategist at Citigroup Global Markets Japan.

Holding off further easing would tend to boost the yen, which in turn tends to weigh on shares of Japanese exporters as it hurts their profitability.

That could see the dollar and Nikkei stock index fall below 101 yen and the 14,000 level respectively, Takashima said. The benchmark index ended Tuesday’s session at 14,075.35.

Investors were also waiting for Wednesday’s release of US Federal Reserve meeting minutes. The minutes cover a two-day Fed meeting that concluded on April 30 at which the Fed trimmed its stimulus programme by another $10 billion to $45 billion a month.

But the bank repeated its view that benchmark interest rates would remain low for some time.

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In other trading, the dollar gained against the Thai baht after the army on Tuesday declared martial law across the country to restore order following months of anti-government protests.

The US unit was changing hands at 32.51 baht, after jumping as high as 32.65 baht earlier Tuesday. It bought 32.47 baht Monday afternoon.

However, market intervention by the Bank of Thailand may have clipped the baht’s fall.

Markets took a cue on speculation of central bank intervention and sold off the dollar, according to a couple of traders based in Singapore.

The dollar was mixed against other Asia Pacific currencies.

The Australian dollar fell to 92.93 US cents from 93.53 cents on Monday, after Reserve Bank of Australia Assistant Governor Guy Debelle signalled the central bank has not given up on pushing the Aussie lower to help ease pressure on exporters.

The US dollar also rose to 58.59 Indian rupees from 58.40 rupees after the Indian unit’s recent advances on the pro-business opposition’s victory in the country’s general election.

The dollar strengthened to 11,446.30 Indonesian rupiah from 11,358.80 rupiah and to 43.69 Philippine pesos from 43.62 pesos.

But the greenback slipped to 1,021.94 South Korean won from 1,022.53 won and to Sg$1.2508 from Sg$1.2510, while it was unchanged at Tw$30.13.

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The Chinese yuan bought 16.24 yen against 16.23 yen.

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