EM ASIA FX-Most Asian currencies weaken as rising yields boost dollar

(Adds text, updates prices)

By Patturaja Murugaboopathy

Feb 21 (Reuters) - Most Asian currencies edged lower on

Wednesday as the dollar was bolstered by rising U.S. Treasury

yields and optimism ahead of Federal Reserve' last policy

meeting minutes, to be released later in the day.

The dollar index was up 0.2 percent at 89.686. It is

up 1.6 percent from Friday's three-year low of 88.251.

Andy Ji, a strategist for Commonwealth Bank of Australia in

Singapore, said rising U.S. Treasury yields will put pressure on

Asian currencies in coming months.

"Market is looking at the threshold of 3 percent in 10-year

U.S. Treasury yield. If it reaches that level, there is going to

be a large risk reduction in the markets," Ji said.

He added it will support the dollar against the Asian

currencies.

The U.S. 10-year Treasury yields were at 2.8877 percent in

Asian hours, hovering near a four-year peak. The rise in yields

came as investors made room for this week's deluge of $258

billion of government debt supply. [ US/ ]

A MUFG report said the minutes of the Federal Reserve's last

policy meeting would be more hawkish and would support the

dollar.

"The minutes is likely to reveal an increase in the number

of FOMC participants that have incorporated fiscal stimulus in

their outlook, as opposed to “less than half” at the December

meeting," the report said.

"These assessments are important as it would give us an

inkling of what the updated dot plot at the 21 March meeting may

be, with the possibility of an upward revision in the longer

term federal funds rate (FFR) projections."

In Asia, the South Korean won fell for the fourth

consecutive session, while the Malaysian ringgit, Indian

rupee and the Thai baht also declined.

On Wednesday, South Korea's central bank chief said on

Wednesday the Bank of Korea is prepared to respond to any

negative impact from faster-than-expected policy tightening in

the United States.

Bucking the trend, the Taiwan dollar and the

Philippine peso edged higher.

INDIAN RUPEE

The Indian rupee touched a three-month low of 64.94

per dollar.

The rupee has lost about 1 percent this week and is the

second worst performing Asian currency against the dollar this

year.

The recent losses were due to concerns over the country's

widening trade deficit and growing fallout from the $1.8 billion

Punjab National Bank fraud.

Exchange data showed total foreign investments in Indian

equities and bond markets have turned negative this month.

INDONESIAN RUPIAH

The Indonesian rupiah was up 0.07 percent on the

day.

Analysts said the rupiah rise was due to rupiah bonds'

eligibility to be included in the Bloomberg Barclays Global

Aggregate Bond Index from June 1, 2018.

"We believe this is medium-term positive rupiah bonds, as it

will encourage a wider set of foreign investors to participate

in the rupiah bond market." said a Standard Chartered report.

"Additional inflows in the coming months support our view

of slight rupiah appreciation as a means to contain inflationary

pressure. We forecast rupiah at 13,000 by mid-year." the report

said.

On Wednesday, Indonesia's central bank governor said it can

overcome the external pressures on rupiah.

The following table shows rates for Asian currencies against

the dollar at 0622 GMT.

CURRENCIES VS U.S. DOLLAR

Change as of 0622

GMT

Currency Latest Previous Pct

bid day Move

Japan yen 107.700 107.31 -0.36

Sing dlr 1.320 1.3190 -0.08

Taiwan dlr 29.227 29.342 +0.39

Korean won 1076.400 1073.5 -0.27

Baht 31.526 31.49 -0.11

Peso 52.100 52.24 +0.27

Rupiah 13600.000 13610 +0.07

Rupee 64.820 64.79 -0.05

Ringgit 3.907 3.902 -0.13

Yuan 6.345 6.3400 -0.08

Change so far in

2018

Currency Latest End 2017 Pct

bid Move

Japan yen 107.700 112.67 +4.61

Sing dlr 1.320 1.3373 +1.31

Taiwan dlr 29.227 29.848 +2.12

Korean won 1076.400 1070.50 -0.55

Baht 31.526 32.58 +3.34

Peso 52.100 49.93 -4.17

Rupiah 13600.000 13565 -0.26

Rupee 64.820 63.87 -1.47

Ringgit 3.907 4.0440 +3.51

Yuan 6.345 6.5069 +2.55

(Reporting by Patturaja Murugaboopathy in Bengaluru; Additional

Reporting by Gaurav Dogra; Editing by Kim Coghill)