Thailand’s baht reached a two-week high and government bonds rose as optimism policy makers will be able to spur global growth boosted demand for higher-yielding assets.
The MSCI Asia-Pacific Index of shares climbed after Federal Reserve Vice Chairman Janet Yellen said the U.S. economy may warrant additional monetary stimulus and European Central Bank President Mario Draghi said the authority stands ready to act if the region’s debt crisis damps the euro-area economy further. Government bonds rose after Thai Bond Market Association data showed global investors bought $327 million more local government debt than they sold this week through yesterday.
“Policy makers noticed the situation is critical and may take some action,” said Shigehisa Shiroki, chief trader on the Asian and emerging-markets team at Mizuho Corporate Bank Ltd. in Tokyo. “That has improved sentiment toward emerging-market assets for now.”
The baht traded little changed at 31.50 per dollar as of 4:02 p.m. in Bangkok after touching 31.37 earlier, the strongest level since May 23, according to data compiled by Bloomberg. One-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 4.52 percent.
The yield on the government’s 3.25 percent bonds due June 2017 declined one basis point, or 0.01 percentage point, to 3.44 percent, according to data compiled by Bloomberg.