Asian currencies declined, led by South Korea’s won, as weaker-than-expected jobs data prompted concern the world’s largest economy may slip into recession, dimming the region’s export outlook. The MSCI Asia-Pacific Index of shares lost more than 2 percent after a report on Sept. 2 showed U.S. payrolls were unchanged last month. Economists expected an increase of 68,000, a Bloomberg survey showed. Germany’s top constitutional court will rule this week in three cases challenging the country’s participation in the Greek bailout and the euro-area rescue fund. “U.S. payrolls were very disappointing,” said Jonathan Cavenagh, a currency strategist at Westpac Banking Corp. in Singapore. “The potential for fresh policy stimulus measures from the Federal Reserve should limit the fallout for equity markets and Asian currencies.” The won weakened 0.6 percent to 1,068.95 per dollar as of 11:40 a.m. in Seoul, according to data compiled by Bloomberg. Malaysia’s ringgit fell 0.3 percent to 2.9750, while the Philippine peso dropped 0.2 percent to 42.23. China’s yuan declined 0.08 percent to 6.3879. The U.S. payroll reading was the weakest since September 2010. The Fed, which is scheduled to review policy at a Sept. 20-21 meeting, has kept its benchmark interest rate at a maximum 0.25 percent since 2008 and announced two rounds of bond buying that boost the supply of dollars. Dollar Sales The won fell the most in two weeks as global funds sold more Korean stocks than they bought, following net purchases of $1.17 billion last week. Korean financial markets will be closed Sept. 12 and 13 for public holidays. “Employment data in the U.S has shifted market sentiment to risk-averse, weakening the won,” said Byeon Ji Young, a currency analyst at Woori Futures Co. in Seoul. “Still, exporters’ dollar sales to repatriate income before the Chuseok holiday and expectations for more stimulus by the Federal Reserve may limit currency losses.” The Bank of Korea will review its benchmark interest rate on Sept. 8. Nine out of 13 economists surveyed by Bloomberg predict the rate will be left at 3.25 percent, while four expect it will be lifted by a quarter of a percentage point. The ringgit snapped a three-day advance on speculation the slowing global economy will deter policy makers from raising borrowing costs when they meet this week. The central bank will leave the overnight rate unchanged at 3 percent when it meets on Sept. 8, according to all 15 economists surveyed by Bloomberg. “Worries of a global economic slowdown are reducing risk appetite,” said Yeo Chin Tiong, head of financial markets at Alliance Bank Bhd. in Kuala Lumpur. “The Malaysian currency will likely trade on a weaker bias.” Elsewhere, the Singapore dollar fell 0.2 percent to S$1.2058 against its U.S. counterpart. Thailand’s baht and Taiwan’s dollar were little changed at 29.94 and NT$29.031, respectively. Indonesia’s rupiah advanced 0.3 percent to 8,541 from Aug. 26. Financial markets in the Southeast Asian nation were closed last week. To contact the reporter on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

Source