Emerging FX-Asian currencies weaker, intervention fears linger

SINGAPORE, Nov 15 (Reuters) Most Asian currencies weakened on Wednesday as the dollar steadied against the yen ahead of U.S. data and as traders worried that regional central banks will step in again to rein in their currencies.

Still, many analysts expect Asian currencies to resume their advances against the dollar in the near future once the outlook for the U.S. economy and for rates becomes clearer.

''Asian currencies took their cue from the latest dollar/yen development, but I think they should strengthen over time,'' said Wang Qing, currency strategist at Bank of America in Hong Kong.

Most Asian currencies slipped from this week's multi-month highs on Tuesday as worries grew that central banks would intervene to cap their currencies. Central banks in South Korea, Thailand and India are suspected to have sold their currencies this week.

In recent weeks, Asian currencies have been driven up by inflows of foreign portfolio investments and more recently by comments from the governor of the People's Bank of China that Beijing planned to diversify its $1 trillion in foreign reserves.

''Once the outlook of a U.S. soft-landing becomes more confirmed, I think Asian central banks should feel easier in handling their currency appreciation,'' Wang said.

Solid gains in Asian stocks, buoyed by capital inflows, would provide some support for Asian currencies, analysts say.

Asian stocks outside of Japan hit a record high on Wednesday, as measured by an MSCI index, following a rally on Wall Street.

The dollar steadied against the yen after sliding earlier on soft U.S. produce price data and retail sales figures that suggested a slowing economy.

The market is now waiting for October's consumer price index, which is due to be published on Thursday and housing starts for the same month, which are due on Friday.

At 0255 GMT, the Korean won had shed nearly a third of a percent to around 939.7 per dollar, which analysts said reflected market caution following recent finance ministry official comments that they were monitoring the movement of the currency and its rise was not based on fundamental factors.

The Malaysian ringgit also fell by almost a third of a percent against the dollar, while the Singapore dollar fell by 0.14 percent to around 1.5580 per U.S. dollar, backing off a nine-year high of 1.5545 struck on Friday and again overnight.

The Taiwan dollar fell marginally to around 32.835 per U.S.

dollar, while the Thai baht fell to 36.5 per dollar from Tuesday's highs around 36.36, its strongest in nearly seven years . CURRENCIES VS U.S. DOLLAR Change on the day at 0310 GMT Currency Latest bid Previous day Pct Move Japan yen 117.68 117.52 -0.14 Sing dlr 1.5574 1.5555 -0.12 Taiwan dlr 32.775 32.765 -0.03 Korean won 939.60 936.90 -0.29 Baht 36.49 36.41 -0.22 Peso 49.95 49.91 -0.08 Rupiah 9125.00 9125.00 +0.00 Rupee 45.17 45.17 +0.00 Ringgit 3.6460 3.6365 -0.26 Yuan 7.8670 7.8669 -0.00 Change so far in 2006 Currency Latest bid End prev year Pct Move Japan yen 117.68 117.96 +0.24 Sing dlr 1.5574 1.6625 +6.75 Taiwan dlr 32.775 32.850 +0.23 Korean won 939.60 1011.60 +7.66 Baht 36.49 41.11 +12.66 Peso 49.95 53.09 +6.29 Rupiah 9125.00 9835.00 +7.78 Rupee 45.17 45.04 -0.29 Ringgit 3.6460 3.7790 +3.65 Yuan 7.8670 8.0702 +2.58 Reuters SP GC0938