March 16 (Bloomberg) -- Indonesia’s rupiah gained, recovering from its biggest one-day drop in two months, as regional stocks rose and the Federal Reserve signaled a more positive assessment of the economy. Benchmark bonds advanced.
The MSCI Asia Pacific Index of stocks surged more than 2 percent today after losing 5 percent yesterday. The pickup in the U.S. economy “is on a firmer footing, and overall conditions in the labor market appear to be improving gradually,” the Federal Open Market Committee said in a statement yesterday.
“Bargain hunters are lifting the market, seeing attractive levels after the massive correction yesterday,” said Prakriti Sofat, a Singapore-based economist at Barclays Capital. “It’s a risk-on environment today helped by the optimistic statement from the Fed.”
The rupiah advanced 0.4 percent to 8,775 per dollar as of 5:05 p.m. in Jakarta, according to data compiled by Bloomberg. The currency weakened 0.6 percent yesterday, its biggest one-day drop since Jan. 10.
Smoke or steam was seen rising from Tokyo Electric Power Co.’s Fukushima Dai-Ichi nuclear power complex this morning, after reactors in Japan were damaged by the 9-magnitude earthquake on March 11.
“Uncertainties will remain fairly high so we can expect markets to be volatile,” added Sofat.
Ten-year government bonds rose. The yield on the 8.25 percent note due July 2021 fell five basis points to 8.36 percent, according to closing prices from the Inter- Dealer Market Association. A basis point is 0.01 percentage point.
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