[TOKYO] High-yielding emerging market currencies often seen as riskier assets suffered big losses on Monday in Asia after strong US jobs figures bolstered the case for a Federal Reserve interest rate lift-off this year.
The South Korean won and the Malaysian ringgit slumped more than one percent, while the Indonesian rupiah was down as well after weak Chinese trade data also weighed on the currencies.
The Japanese yen also fell with the dollar hitting a fresh two-month high after US Labor Department data on Friday showed the world's top economy added 271,000 net new jobs last month.
The data suggested that worries were overblown that an emerging markets growth slowdown had infected the US economy.
The greenback rose to 123.38 yen from 123.16 yen Friday in New York, after hitting 121.66 earlier Friday in Asia.
China on Sunday reported disappointing trade figures that took a bite out of emerging and commodity-linked currencies, with imports into the world's number two economy falling almost a fifth in October from a year ago. Exports also continued to fall on lacklustre foreign demand.
"The strong dollar is central in this move today as the non-farm payrolls was very strong," Nizam Idris, head of currencies and fixed-income strategy at Macquarie Bank Ltd. in Singapore, told Bloomberg News.
"China news was poor and that didn't help." Higher-yielding emerging units have been hit hard this year on fears of a flight of capital back to the United States as dealers look for better, safer investments on the back of the looming US rate lift-off.
The greenback had suffered a heavy sell-off against the Asian emerging currencies in October, however, as the US Federal Reserve held the trigger on its interest rate lift-off at its October policy meeting, though a hike could still come before the end of the year.
"With the US rate hike on the horizon, a drop in imports puts the focus on the slowdown in the Chinese economy, and falling resources prices or emerging stocks may bolster risk aversion," Toshiya Yamauchi, a senior analyst in Tokyo at Ueda Harlow Ltd., a margin-trading services provider, wrote in a note to clients.
"In that environment, the dollar and yen will be bought." In other deals, the euro was up to US$1.0765 and 132.81 yen from US$1.0742 to 132.30 yen in US trade.