Seoul, March 16 (Bloomberg) -- Asian currencies extended losses against theU.S. dollar, led by the Korean won as a weakening Japanese yen threatens tocurb demand for other Asian exports and the currencies needed to buy them. The won fell 0.8 percent to 1,292.30 against the U.S. dollar, a two-month low.The yen fell to a 20-month low against the dollar, rounding out a third losingweek on talk that the U.S. and Japan will agree to let the yen weaken whenthe heads of states meet Monday. U.S. President George W. Bush and Japanese Prime Minister Yoshiro Moriare expected to discuss ways to help revive Japan's faltering economy whenthey meet in Washington Monday. Weakening the yen may be one option toboost the world's second-largest economy by making exports morecompetitive, traders speculated. ``Sentiment for the entire region is bearish,'' said Rovic De Guzman, a seniordealer at Union Bank of Philippines. ``Everyone is watching the yen hittingnew lows.'' Elsewhere in Asia, excluding Japan, other currencies followed the yendecline. The Taiwan dollar fell 0.4 percent to NT$32.683, a two-month low andits biggest one-day fall in almost four months. The Philippine peso fell 0.1percent to 48.50 per dollar. The Singapore dollar fell 0.2 percent to S$1.7721. The Thai baht dropped 0.3 percent to 43.97 per dollar after the central banksaid it wasn't worried by the currency's decline. The Indonesian rupiahdropped 2.1 percent to 10,310 on demand for the U.S. dollar to repayoverseas debt.
Korea/Taiwan
The Korean won and Taiwan dollar extended losses as a weakening Japaneseyen threatens to curb demand for exports from the two countries and thecurrencies to buy them, analysts said. In the past three months, the yen has tumbled 19 percent, becoming theworld's third worst-performing currency after the Turkish lira and Australiandollar. ``With a weaker yen, both the Korean won and the Taiwan dollar are going toweaken,'' said Steven Xu, a director and senior economist at SG SecuritiesAsia Ltd. in Hong Kong. ``The U.S. dollar is going to remain strong for awhile.'' Korea and Taiwan rely on export growth to boost their economies. That growthmay slow as a weaker yen makes Japanese goods comparatively cheaperthan those made by Asian rivals. Almost half of Korea's export marketcompetes with Japan. Export growth is also affected by the global slowdown. A faltering U.S.economy saps demand for Asian exports, reducing demand for currency ascompanies have less proceeds from overseas sales to convert.
Philippine Peso
The Philippine peso, the world's best-performing currency this year, fell for asixth day, tracking weakness in other regional currencies. ``The peso is dragged by the region,'' Union Bank's De Guzman said. ``Thebaht tends to follow the yen and the peso tends to follow the baht.'' Adding to the peso's losses, Philippine unemployment rose to 11.4 percent, anine-month high, from a revised 9.5 percent a year earlier, the NationalStatistics Office reported. A slowing economy and a political crisissurrounding former President Joseph Estrada prompted companies to shedworkers and freeze hiring.
Thai Baht
The Thai baht fell to a three-month low after the government and the centralbank signaled they are not worried by the currency's decline as it reflects thecountry's fundamentals. ``The baht's movement reflects the country's economic and politicaldevelopment,'' Central Bank Governor Chatumongkol Sonaku said. ``Thecurrency is less volatile compared with others, as it has taken several monthsto weaken.'' The baht has been falling on concern the economy may not recover aspledged by the government of new Prime Minister Thaksin Shinawatra. The government may condone a weaker baht as it would help exports bymaking Thai goods cheaper to overseas buyers, analysts said. ``We're notworried about the current weakness in the baht,'' Thaksin said. The Bank of Thailand said the economy may expand by as little as 3 percentthis year, cutting an earlier forecast of between 4 percent and 5.5 percent.Last year, the economy grew between 4 percent and 4.5 percent, the banksaid.
Indonesian Rupiah
The Indonesian rupiah snapped a three-day rally as companies takeadvantage of the currency's latest gains to convert rupiah in order to payoverseas debts, analysts said. Indonesian companies have $3.9 billion in maturing debt this month. Paying that debt ``will have a tremendous weight on the rupiah,'' said SureshKumar, a currency analyst at Standard & Poor's MMS International inSingapore. ``It's more than all the debt paid in 2000 and 75 percent of thedaily volume being traded.'' The rupiah may drop a further 15 percent to 12,000in the next month, he said. How quickly the rupiah declines will be determined by central bank activity.Bank Indonesia has pledged to defend the currency to offset excessiveweakness, Kumar said. Still, intervention alone may not be sufficient to stopthe rupiah from weakening. ``We have to see improvements on the political front, like a more stablegovernment, where you don't have challenges to the status quo,'' Kumar said. President Abdurrahman Wahid has failed to stem domestic violence or spureconomic growth, putting his leadership under increasing pressure.