JAKARTA (Reuters): The South Korean won and equities plummeted on Friday following fresh reports of a potential second martial law, which had previously unsettled traders before being retracted, while other Asian markets were largely mixed.
The won initially plunged 1.1% against the US dollar before recovering to trade 0.4% lower, likely due to suspected central bank intervention for the second time this week.
The won, the worst performing currency in Asia this year, is set to lose over 1.7% in value this week as the political turmoil in the wake of President Yoon Suk Yeol's reversal of martial law declaration dented sentiment.
The benchmark KOSPI index, also the worst performer in the region, fell for a third consecutive session, hitting its lowest since Nov. 15.
Meanwhile, the Indian rupee was stable as the Reserve Bank of India maintained its rates due to persistent inflation. The currency hit an all-time low of 84.7575 on Tuesday amid a stronger dollar and concerns around economic growth.
Most other Asian currencies traded flat with the Taiwanese dollar and Thailand's baht adding a modest 0.2% each.
A gauge of emerging market currencies dipped as much as 0.8% this week to levels last seen in late-August as dollar strength persisted following US President-elect Donald Trump's tariff threats last week.
The dollar index rose 0.10% to 105.82 after slipping towards a three-week low in the previous session.
The US November jobs report, due later in the day, is expected to indicate whether the Federal Reserve will likely cut rates by 25 basis points at its December 17-18 meeting, with current odds favouring such a reduction.
Asian markets focused on domestic inflation data this week, as cooling November figures in South Korea and Indonesia boosted rate cut expectations, while inflation rose in Taiwan and the Philippines.
The post-U.S. election dollar surge should have limited impact on this week's emerging market inflation reports, analysts at Barclays wrote.
"But, even if inflation surprises to the upside, we do not expect material local rates reactions, as local inflation dynamics remain benign, while higher rates were mainly driven by spillover from the core markets."
Share markets in the region fell marginally, with those in Taiwan and Malaysia losing 0.2% while stocks in Singapore fell 0.4% and Indonesia's benchmark rose 0.4%. - Reuters
