Thailand’s baht and Malaysia’s ringgit led Asian currency gains to the best week since September on speculation Japan’s monetary easing will increase the flow of funds into emerging-market assets.
The baht strengthened beyond 29 per dollar for the first time since 1997 and the ringgit appreciated for a fourth week, the longest run in 14 months. The risk of a nuclear test or missile launch by North Korea drove South Korea’s won to an eight-month low amid threats by the Communist state to attack the U.S. and its Asian neighbor. The Bank of Japan (8301) said April 4 it plans to buy 7.5 trillion yen ($75.4 billion) of bonds a month in the biggest move since its easing started in 2001.
“I expect the Bank of Japan’s plan to double its monetary base will lead to a pickup in inflows to emerging Asia,” said Khoon Goh, a Singapore-based senior strategist at Australia & New Zealand Banking Group Ltd. (ANZ) “Some of the outflows were likely due to concerns over tensions on the Korean peninsula.”
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