(Bloomberg) -- The South Korean won and the Indonesian rupiah rose after Treasury Secretary Timothy Geithner said the “vast majority” of U.S. banks have enough capital, helping address concerns that prompted investors to pull funds from emerging markets earlier in the week.
The won advanced as Vice Finance Minister Hur Kyung Wook said today South Korea’s stock and currency markets are “stable” and the economy is showing both positive and negative signs. The MSCI Asia-Pacific Index of shares gained after the Standard & Poor’s 500 Index climbed the most in a week. Japan’s export slump eased in March, ending a four-month run of record declines, according to a report released today.
“In general, Asian currencies are pretty stable and the stocks are slightly stronger,” said Thomas Harr, a senior currency strategist at Standard Chartered Plc in Singapore. “Risk appetite is still pretty high. The recession is probably slowing, not because we’re out of the recession. The Japanese data is in line with that.”
The won climbed 0.2 percent to 1,346.35 per dollar as of 11:54 a.m. in Seoul, according to data compiled by Bloomberg. The currency has strengthened in each of the last six weeks and touched a three-month high of 1,298.05 on April 10. The rupiah rose 0.3 percent to 10,840 in Jakarta. The Indonesian currency has advanced 6.6 percent this month.
The MSCI Asia-Pacific Index rose as much as 0.6 percent, following a 2.1 percent gain in the S&P 500.
Better Equities
“The Korea won is a touch stronger on the back of better equities in the U.S.” said Dwyfor Evans, a Hong Kong-based strategist at State Street Global Markets. “We’ve had five weeks of very strong equity performance that’s driven the emerging-market currencies stronger, but that’s been more hit- and-miss in the last few days.”
The Kospi stock index climbed 1.1 percent, headed for its highest close since October. Overseas investors yesterday turned net sellers of Korean shares, contributing to a drop in the won, after Bank of America Corp. set aside more money for bad loans.
Financial institutions worldwide have reported credit losses exceeding $1.3 trillion since a credit crisis began in mid-2007. Losses may reach $4.1 trillion by the end of 2010, the International Monetary Fund said in a report yesterday.
“Currently, the vast majority of banks have more capital than they need to be considered well capitalized by their regulators,” Geithner said yesterday in testimony to a U.S. congressional oversight panel.
Japan Exports
The yen strengthened following the release of March trade figures. Japan’s Ministry of Finance said custom-cleared exports declined 45.6 percent from a year earlier, following a record drop of 49.4 percent in February.
The yen climbed to 98.37 per dollar in Tokyo from 98.73 yesterday in New York.
Elsewhere, Taiwan’s dollar and the Thai baht rose 0.1 percent to NT$33.82 and 35.53, respectively. The Malaysian ringgit advanced 0.1 percent to 3.6410, and the Singapore dollar was at S$1.5077 versus S$1.5085 yesterday. The Vietnamese dong slid 0.1 percent to 17,800.
To contact the reporters on this story: Lilian Karunungan in Singapore at at lkarunungan@bloomberg.net
