By Bob Chen Aug. 10 (Bloomberg) -- Indonesia’s rupiah was Asia’s best- performing currency today after the government reported second- quarter economic growth that beat analysts’ estimates. The South Korean won and Taiwan dollar fell on speculation of intervention. The rupiah traded near a nine-month high after gross domestic product rose 4 percent from a year earlier, a pace that trails only China and India in the region. Japan today reported a bigger gain in machinery orders than economists forecast and the U.S. announced Aug. 7 an unexpected drop in its jobless rate. “All the economic indicators are very good for Indonesia like interest rates, inflation and growth,” said Lindawati Susanto, head of foreign-exchange trading at PT Bank Resona Perdania in Jakarta. “The increased inflows into global and Asian stocks will have a positive impact on the rupiah.” The rupiah rose 0.4 percent to 9,930 per dollar as of 4:09 p.m. in Jakarta, according to data compiled by Bloomberg. It touched 9,850 on Aug. 4, the strongest level since October. The won weakened 0.3 percent to 1,228.05 and Taiwan’s dollar fell 0.1 percent to NT$32.818. The MSCI Asia-Pacific Index of regional shares rallied 1 percent today to reach the highest level in more than 10 months. Foreign investors bought more Indonesian stocks than they sold on all but one of the last 17 trading days. Indonesia’s growth in the third-quarter may exceed forecasts as overseas demand for local products is improving, central bank Senior Deputy Governor Darmin Nasution said today. The median estimate in a Bloomberg News survey of economists was for a growth rate of 3.8 percent in the three months to June. U.S. Recovery The U.S. economy may be recovering and the impact of stimulus spending should increase this quarter, Laura Tyson, an adviser to President Barack Obama, said in the Malaysian capital of Kuala Lumpur yesterday. Payrolls fell by 247,000 in July, after a 443,000 loss the previous month, the Labor Department said on Aug. 7. Japan’s machinery orders, an indicator of capital investment in the next three to six months, rose 9.7 percent in June from May, climbing for the first time since February. Economists surveyed by Bloomberg forecast a 2.6 percent gain. Korea’s won fell after last week reaching a nine-month high, on speculation the central bank intervened in late trading to prevent the currency’s appreciation from prolonging a slump in exports. Korean Intervention The currency earlier rose as much as 0.4 percent and the Kospi index touched a one-year high as global funds added to their holdings of local shares for a 19th day, the longest run of net purchases in a decade. South Korea’s economy will shrink 1.8 percent this year, the IMF said yesterday, revising a July prediction for a 3 percent contraction. “There’s concern of official intervention around 1,220, that’s a major psychological support level,” said David Mann, senior foreign-exchange strategist at Standard Chartered Plc in Hong Kong. “The better-than-expected data are positive for the won and should help equity flows into Korea.” Taiwan’s dollar fell for a third day, extending its slide from a two-month high, on concern the Central Bank of the Republic of China (Taiwan) is also seeking to cap gains in its currency. Central banks intervene to try and influence exchange rates by buying and selling currencies. ‘Turned the Page’ “With all the good economic reports increasing optimism that we turned the page of the global financial crisis, it’s a question of whether the Asian monetary authorities will tolerate appreciation,” said David Cohen, an economist at Action Economics in Singapore. “They don’t want to be the only ones to lose competitiveness.” Overseas investors bought $2.1 billion more of the island’s shares than they sold in July, and this year’s net purchases total $7.2 billion, exchange data shows. China’s yuan traded at the lowest level in more than a month after the central bank set the daily reference rate weaker following gains in the dollar last week. The People’s Bank of China, which has stalled yuan appreciation since July 2008, fixed the currency rate at 6.8346 per dollar, the weakest since June 16. The monetary authority reiterated its pledge to keep the yuan stable “at a reasonable and balanced level,” according to a statement on Aug. 5. China’s currency traded at 6.8346 in Shanghai, compared with 6.8318 at the end of last week, according to the China Foreign Exchange Trade System. It touched 6.8355 today, a level that was last reached on June 29. The U.S. Dollar Index traded on ICE futures in New York, which tracks the currency against those of six major trading partners, rose 1.2 percent to 78.98 on Aug. 7, the biggest gain since June 15. It declined 0.2 percent to 78.85 today. “The drop in the reference rate is a normal reflection of the dollar’s rise last Friday,” said Huang Huawei, a foreign- exchange trader at Shenzhen Development Bank Co. in Shenzhen. “We haven’t seen any sign of change in the currency policy.” Elsewhere, the Philippine peso rose 0.1 percent to 47.702 per dollar and the Malaysian ringgit was little changed at 3.5035. Vietnam’s dong traded at 17,812 from 17,814 last week. Financial markets in Singapore were closed for a holiday. To contact the reporter on this story: Bob Chen in Hong Kong at bchen45@bloomberg.net.

Source