SINGAPORE, Nov 14 — Emerging Asian currencies and bonds extended losses today, with Malaysia’s ringgit near 10-month lows on growing fears that higher US Treasury yields on US president-elect Donald Trump’s policy stance may spur more regional capital outflows.

Asian policymakers continued to pledged efforts to stabilise their currencies, but investors took those comments as chances to cut risks of further depreciation in emerging Asia.

"It will start some bond outflows but I think we are more in the first step when investors hedge the FX risk,” said Sean Yokota, head of Asia strategy at Scandinavian bank SEB in Singapore, when asked if higher US yields will prompt more bond outflows.

"People will wait until after the Fed meeting in December to make big decisions on whether to sell the underlying bonds. If we get a bullish or hawkish forward guidance from the Fed, then that can start some bond selling,” Yokota said, referring to the US Federal Reserve’s policy decision on December 13-14.

The 10-year US Treasury yield jumped to a 10-month peak of 2.2 per cent, reducing attractiveness of higher returns from bonds of emerging Asia. Spot ringgit lost ground in the local market, tracking falls in Malaysia’s stocks and bond prices . The currency in offshore markets surged after the central bank said on Saturday it would "re-enforce” existing rules that prohibit facilitation of offshore trading of the currency.

The Chinese yuan hit a six-year low on a weaker guidance rate by the People’s Bank of China, reflecting broad strength in the US dollar. Indonesia’s rupiah fell as long-term government bond prices slid and foreign investors sold local stocks.

The Philippine peso slumped to 49.18 per dollar, its weakest since March 2009 on equity outflows. The South Korean won skidded to a near five-month low as foreign investors cut stock holdings amid a deepening political crisis.

Ringgit

Spot ringgit fell as much as 1.2 per cent to 4.3300 per dollar, its weakest since January 22.

Malaysia’s government 10-year yield shot up more than 25 basis points to 4.074 per cent, its highest since January 20. Kuala Lumpur shares also lost nearly 1 per cent. By contrast, the ringgit jumped about 3 per cent in non-deliverable forwards (NDFs) after the central bank’s comments.

Bank Negara Malaysia said the currency remains a non-internationalised currency, thus any offshore trading of ringgit such as ringgit NDFs, is not recognised.

Elsewhere in Asia, Singapore’s central bank on Friday said it is ready to curb excessive volatility in the Singapore dollar if necessary.

South Korea also said on Monday the government stood ready to act to stabilise financial markets in the wake of rising volatility.

Rupiah

The rupiah fell on bond outflows with the Indonesian government 10-year yield at 7.708 per cent, the highest since June 27. Jakarta stocks lost nearly 3 per cent.

Foreign investors were net sellers in Indonesia’s stock market over the previous three straight sessions with Friday’s sale of 2.5 trillion rupiah (RM809.9 million) being the largest daily unloading since October 26 last year, according to Thomson Reuters data.

Bank Indonesia was not spotted intervening to stem the rupiah’s weakness today, traders said, but caution increased over the possibility it would step in to manage volatility.

The authority may do so if the rupiah weakens to 13,400 per dollar, compared with the currency’s session low of 13,375, a Jakarta-based currency trader said. — Reuters