By Kim Kyoungwha and Clarissa Batino Dec. 23 (Bloomberg) -- Asian currencies weakened, led by South Korea’s won, on concern a deepening global recession will hurt regional exports and prompt international investors to shun emerging-market assets. Most Asian currencies declined before reports today that economists predict will show Taiwan’s export orders last month tumbled the most since 2001 and new home sales in the U.S. reached a 17-year low. The won, which gained in each of the last two weeks, is headed for its biggest annual decline since 1997 and the Philippine peso is set for its worst year since 2000. “Investors are selling assets bought a few weeks ago as recent data show there are more risks, not less,” said Vishnu Varathan, a regional economist at Forecast Singapore Pte. “Recent gains in the peso and other regional currencies seem to be a bit overdone, considering the market’s view that there isn’t much to support the rally in 2009.” South Korea’s won slumped 2.5 percent to 1,343.50 as of 1:44 p.m. in Seoul, according to Seoul Money Brokerage Services Ltd. It’s down 30 percent this year, the worst performance in Asia. The peso lost 0.4 percent to 47.49 in Manila, extending this year’s slide to 13 percent. Japan, China, India and South Korea -- Asia’s four biggest economies -- have all reported slides in exports this month and, with the exception of the Philippines, benchmark stock indexes fell across regional bourses open for trading. Japan’s financial markets are closed today for a public holiday. Share Sales Overseas investors sold a net $37 billion worth of South Korean stocks this year and the Kospi stock index plunged 39 percent as a seizure in global credit markets prompted investors and banks to hoard dollars. The won’s slide may be limited by speculation the authorities will support the currency to help prevent year-end exchange-rate moves undermining balance sheets for companies and banks, according to Park Hae Il, an options trader with Shinhan Bank in Seoul. “As seen in the past months, the currency market is taking an early cue from stock movements,” Park said. “Nonetheless, the government’s intention to moderate the won’s loss ahead of year-end will be reflected in the market.” The yen was little changed at 90.28 per dollar from 90.25 late yesterday in New York. The Japanese currency reached a 13- year high of 87.14 on Dec. 17. Exports Slump Taiwan’s dollar declined 0.3 percent to NT$33.033 per dollar, after yesterday sliding 1.2 percent, the most in seven years. Export orders fell 13.6 percent in November from a year earlier, a Bloomberg News survey showed before a government report today. Sales of new homes in the U.S., the world’s biggest economy, fell to an annual pace of 415,000 in November, according to economists surveyed by Bloomberg before a Commerce Department report today. The Central Bank of the Republic of China (Taiwan) bought between $100 million and $200 million last week, seeking to curb the Taiwan dollar’s appreciation, the Central News Agency said yesterday, citing unidentified traders. Last week’s 2.4 percent weekly advance was the currency’s best performance in a decade. “The central bank is taking the opportunity of thin trading activity this week to push the currency to a more competitive level for exports,” said Christy Tan, a currency strategist at Bank of America Corp. in Singapore. “The market thinks that the worst is not over yet. The natural reaction is to offload risky assets.” Rate Cut China’s yuan traded at 6.8505 a dollar, little changed from 6.8510 yesterday, after the People’s Bank of China cut interest rates for the fifth time since the start of September to help the economy. “The rate cut was modest but in line with policy to continue to ease,” said Irene Cheung, a corporate director for local-markets trading at ABN Amro Bank NV in Singapore. “We should position for China eventually allowing the yuan to weaken as exports will deteriorate further into 2009.” Vietnam’s dong was little changed at 16,989 versus the dollar and Thailand’s baht fell 0.1 percent to 34.58. Indonesia’s rupiah rose 0.6 percent to 11,085 and Malaysia’s ringgit lost 0.1 percent to 3.4845. India’s rupee dropped 1 percent to 48.525. To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net; Clarissa Batino in Manila at cbatino@bloomberg.net.

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