Yen Correction Drags Rupiah Down

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  • REUTERS/Yuriko Nakao

    REUTERS/Yuriko Nakao

    TEMPO.CO, Jakarta - The Japanese yen's correction against the US dollar dragged other Asian currencies down, including the rupiah. In yesterday's currency trade, the rupiah plunged 46 points (0.39 percent) to close at a low 11,771 per US dollar.

    Money market observer Susanto Lindawati said the greenback is gaining a strong hold in the currency market, pushing the yen down to its lowest level in six years. The increase in US nonfarm payroll and manufacturing index also boosted the dollar, while at the same time, the Bank of Japan (BoJ) announced it would spend 10 trillion yen stimulus per year.

    "As a result, the yen fell sharply and dragged rupiah down," she said.

    The US dollar's skyrocketing rate is also supported by selling pressure in the American market as well as some emerging markets including Indonesia. "Market participants began to reduce their investment risks, shifting to US dollars."

    The lack of positive sentiments is expected to lead the rupiah down to 11,800 rupiah per dollar. "Today the rupiah will move in the range of 11,700 to 11,800 per US dollar," said Linda.