HONG KONG, 19 September 2005 — Asian currencies ended the week mixed with the Japanese yen gaining against the dollar on the back of Prime Minister Junichiro’s election victory but then losing ground in line with other regional currencies as the market awaited next week’s decision on US interest rates.

Japanese Yen: The yen edged up against the dollar as the market welcomed an overwhelming election win by Japanese Prime Minister Junichiro Koizumi’s ruling party in Sunday vote, but the rally was mitigated by expectations that the US Federal Reserve will raise its key interest rate this week, dealers said.

The yen stood at 110.51 to the dollar late Friday, up from 110.58 to the dollar a week earlier.

It rose to 109.27 yen in Monday morning trade in Tokyo on the back of the reform-minded Japanese premier’s crushing victory, but the upward trend was short-lived as dealers’ attention quickly shifted to the weekend elections in Germany and the prospect of the US interest rate hike.

The US Federal Open Market Committee (FOMC) is scheduled to meet tomorrow.

“Recent remarks from key Fed members and the Beige Book (Fed survey of current economic conditions) suggest that the Fed will likely raise interest rates although Hurricane Katrina’s impact is still unclear,” said Mamoru Ashimoto, a capital markets division manager at Shinsei Bank.

Kikuko Takeda, currency analyst at the Bank of Tokyo-Mitsubishi, said that although “there is a small possibility of a pause” in interest rate rises because of the impact of Hurricane Katrina, the excessive worries on it have waned. A drop in oil prices also weighed on the yen, easing pressure on the US economy and supporting the dollar, dealers said.

Australian Dollar: The Australian dollar ended the week slightly lower Friday with a coming decision by the US Federal Reserve on interest rates likely to restrict it moving any higher in the coming week, dealers said.

At 5:00 pm Friday (0700 GMT) the Australian dollar was trading at 76.98 US cents, down from the previous week’s 77.18 US cents.

Further movement will hinge on the Federal Reserve’s expected interest rate hike of 25 basis points to 3.75 percent mid next week. “We’ve seen over the past few days that the US dollar has strengthened on the expectations that the Fed will continue their tightening cycle,” said CMC Markets foreign exchange dealer Josh Whiting. “That’s capped the Aussie this week at the mid 77s.” If the Federal Reserve decides against the interest rate hike “that’s likely to offer (the Australian dollar) some support,” he added.

New Zealand Dollar: The New Zealand dollar ended the week at 70.76 US cents in local trading, slightly higher from 70.43 the previous week.

The local currency was buoyed by strong retail sales data early in the week, while hawkish comments on interest rates by central bank Governor Alan Bollard had little impact. Dealers said uncertainty about the income of Saturday’s election also did not have a major impact on the kiwi.

Chinese Yuan: The Chinese yuan closed at 8.0871 to the US dollar Friday, the central bank said in a statement on its website. That compared with a closing price of 8.0887 the previous trading day and is the highest close price since the yuan was revalued on July 21. The central bank did not give the intraday high and low prices.

In accordance with its new policy, the State Administration of Foreign Exchange will take the closing price as the mid-point for the next trading day. The central bank allows a trading band of 0.3 percent either side of the mid-rate.

Hong Kong Dollar: The US-pegged Hong Kong dollar closed the week at 7.765 little changed from 7.766 a week earlier.

Indonesian Rupiah: The rupiah closed slightly stronger Friday at 10,150-10,160 to the dollar compared to last week’s close of 10,210-10,220.

Philippine Peso: The Philippines peso traded lower at 56.17 on Friday afternoon, compared to 56.06 on Sept. 9.

Singapore Dollar: The dollar was at 1.6788 Singapore dollars on Friday from 1.6783 the previous week.

South Korean Won: The won closed at 1,027.80 won per dollar Friday, compared with 1,027.20 won a week earlier.

Dealers said the dollar might rise to 1,030 won on Tuesday following the Chusok holidays should foreigners remain net sellers at the stock market amid speculation that the United States may raise interest rates.

Taiwan Dollar: The Taiwan dollar declined 0.55 percent over the week to end at 32.931 against the greenback Friday. It finished at 32.750 a week ago.

Thai Baht: The baht was stable against the US dollar in the past week as the market adopted a wait-and-see attitude on a decision next week by the US Federal Reserve on interest rates, dealers said. They said the baht was also supported by the Thai central bank’s surprise hike of half a point in the benchmark interest rate to 3.25 percent last week.

The Thai unit closed on Friday at 40.98-41.00 baht to one dollar compared to last week’s close of 40.99-41.02. But the Thai unit rose slightly against the euro to close at 50.28-35 to one euro compared to the previous week’s close of 50.80-90.