Asian currencies strengthened, led by Taiwanâ€™s dollar and Indonesiaâ€™s rupiah, as the Federal Reserveâ€™s asset-purchase plan spurred inflows into the regionâ€™s higher-yielding assets.
International investors increased holdings of South Korean, Taiwanese and Indonesian stocks by $1.8 billion on Sept. 14, a day after the Fed announced it would expand holdings of long- term securities with open-ended buying of $40 billion of mortgage debt per month in a third round of quantitative easing. The MSCI Asia Pacific Excluding Japan Index (MXAPJ) of shares touched a four-month high today after advancing by 3.1 percent, the most this year, on Sept. 14.
â€œThe QE3 is giving a boost to sentiment and expectations of capital inflows,â€ said Wee-Khoon Chong, a fixed-income strategist at Societe Generale SA in Hong Kong. â€œThe boost for the foreign-exchange rate from QE3 is likely to be temporary.â€