EM ASIA FX-South Korean won gains over 1%, most others subdued on persistent virus worries

By Shriya Ramakrishnan

* South Korean won at over 1-week high * Volatility likely as long as virus does not peak - analyst * Malaysian ringgit strengthens (Adds text, updates prices) By Shriya Ramakrishnan March 25 (Reuters) - South Korea's won rose sharply on Wednesday after domestic policy measures to boost dollar liquidity helped ease credit concerns, while most other Asian currencies were range bound amid lingering concerns related to the coronavirus outbreak. Tracking sharp gains in local equity markets, the won advanced as much as 1.8% to 1,227 against the greenback, its strongest level in more than a week. The South Korean government said it will further loosen key capital flow rules temporarily to encourage local financial institutions to supply more dollars, while the central bank also plans to inject dollars into markets this week using a currency swap with the U.S. Federal Reserve. While the dollar pulled back sharply from recent peaks, the risk-on mood across the region was subdued as more countries adopted stringent measures and imposed lockdowns in a bid to step up virus containment efforts. "To some extent, we are probably closer to a market bottom than before and it is likely that some of the overshoots in USD and excessive rise in bond yields correct lower at some stage," Christopher Wong, senior FX strategist at Maybank Singapore said. "That said it is not all hunky dory out there and markets are likely to stay volatile for as long as coronavirus does not peak and the virus spread is faster than policy responses." India ordered a lockdown for the next three weeks, while Thailand will be in emergency mode from Thursday for a month to deal with the pandemic. The Thai baht weakened as much as 0.3% during the session before paring some losses. The Chinese yuan eased slightly, while the Philippine peso weakened 0.7%, its worst intraday performance in more than a week. The Singapore dollar wavered between positive and negative territory. Markets will now focus on the release of first-quarter preliminary growth figures, new stimulus measures and the central bank's policy decision on Thursday. Meanwhile, the Malaysian ringgit strengthened 1% to 4.385 per dollar. Bank Negara Malaysia said the central bank has enough liquidity to ease financial strains and support intermediation activities, while it will continue to supply daily ringgit liquidity to banks via various tools under its open market operations. The Malaysian government extended a two-week virtual lockdown to April 14 and is also set to announce a comprehensive people-oriented economic stimulus package on Friday. Financial markets in India and Indonesia were closed for a holiday. CURRENCIES VS U.S. DOLLAR Change on the day at 0526 GMT Currency Latest bid Previous Pct day Move Japan yen 111.380 111.21 -0.15 Sing dlr 1.446 1.4462 +0.01 Taiwan dlr 30.291 30.316 +0.08 Korean won 1229.400 1249.6 +1.64 Baht 32.800 32.79 -0.03 Peso 51.215 50.86 -0.69 Ringgit 4.385 4.428 +0.98 Yuan 7.071 7.0620 -0.12 Change so far in 2020 Currency Latest bid End 2019 Pct Move Japan yen 111.380 108.61 -2.49 Sing dlr 1.446 1.3444 -7.03 Taiwan dlr 30.291 30.106 -0.61 Korean won 1229.400 1156.40 -5.94 Baht 32.800 29.91 -8.81 Peso 51.215 50.65 -1.10 Ringgit 4.385 4.0890 -6.75 Yuan 7.071 6.9632 -1.52 (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Shounak Dasgupta)