HONG KONG, JAN 21: Indonesia's battered rupiah dragged most Asia markets back into a quagmire on Wednesday. Strength in Tokyo and New York failed to spill over to the rest of Asia, where nearly every market reacted badly to an early session plunge in the rupiah to 12,000 to the US dollar.The rupiah hurtled lower on reports that Indonesian corporates were resorting to rupiah payments on US dollar debt, while renewed political jitters added another broadside.Beleaguered President Suharto confirmed he would seek a seventh five-year term in office, perhaps with big-spending technology minister Jusuf Habibie as his vice-president.Callum Henderson, managing analyst at MMS International, said Habibie's reputation for profligate spending flies in the face of the austerity required by a US$ 43 billion bail-out deal from the International Monetary Fund.There was also concern about his lack of a military background, Henderson added. "Is he the kind of person the market wants because of the IMF terms for austerity, and also does the army want him? These are the issues markets are focused on right now," he said.All Southeast Asian currencies sank, as did the South Korean won. Stocks also fell. Hong Kong's blue-chip Hang Seng index ended the morning session 2.64 per cent weaker at 9,184 with the Indonesia factor neutralising Tuesday's 1.5 per cent rise in New York stocks.Asia also took little comfort in Tokyo's strong performance. Renewed hopes for economic stimulus measures from the Liberal Democratic Party government lifted the Nikkei 225 index by 208 points to 16,574 early in the afternoon session. The yen, buoyed by the same hopes, firmed to 128.60 to the dollar.Taiwan enjoyed a lift from Tokyo's gains, with the currency slightly firmer at T$33.49 to the U.S. Dollar and stocks up 2.41 percent to 8,098.And Thailand stocks bounced up 2.17 per cent by midday on foreign buying following comments overnight by IMF first deputy managing director Stanley Fischer that the country's financial crisis appearedto be easing.But the rest of Asia continued to suffer, with the Malaysian ringgit, the Singapore dollar, the Philippine peso and the Thai baht all weaker.Stocks were softer across the board, except in Jakarta where dealers said arbitrage trade on American Depositary Receipts helped the main stock index to rise more than four per cent. In South Korea, stocks sank more than five per cent as foreign interest dried up and locals took profits. The won followed suit, suffering from the lack of foreign interest.
