By Bloomberg News Feb. 12 (Bloomberg) -- Asian currencies completed the best week in more than a month as a pledge by European leaders to defend Greece boosted investor confidence in emerging-market assets and data added to evidence of a regional recovery. The Bloomberg-JPMorgan Asia Dollar Index climbed this week for the first time since the period ended Jan. 8, while the MSCI Asia-Pacific Index of shares rallied 1.6 percent. The European Union promised “determined and coordinated action” for Greece, without providing specifics before they meet again on Feb. 15. Reports showed Taiwan exports rose by the most in more than 30 years and Malaysia’s factory output posted the biggest increase in 22 months. “On the surface, what they want to do is to calm the markets,” said Roland Avante, treasurer at Sterling Bank of Asia in Manila. “The statement should start sparing emerging markets from the effects of the sovereign crisis happening in Europe.” South Korea’s won led gains among Asian currencies this week, strengthening 1.5 percent to 1,151.40 per dollar at the 3 p.m. close in Seoul, and Indonesia’s rupiah appreciated 1.2 percent to 9,333, according to data compiled by Bloomberg. Malaysia’s ringgit rose 0.8 percent to 3.4185 and Singapore’s dollar advanced 0.8 percent to S$1.4120. The European Union pledged to defend Greece from speculative attack and was looking at establishing a lending facility for the country following a summit in Brussels yesterday. Officials said they “fully” support Greece’s efforts to rein in its budget deficit, the largest in the 27- member grouping. Euro Loss The statements failed to convince some investors, sending the euro lower against the dollar and yen, while funds pulled money out of equity funds in developing nations. The euro declined to 122.71 yen in London from 122.90 in New York. Europe’s currency fell to $1.3671 from $1.3693 yesterday, when it dropped to $1.3596, the lowest level since Feb. 5. Outflows from emerging-market equity funds reached $2.9 billion in the week to Feb. 10, the highest amount since the period ended July 9, 2008, according to data from Cambridge, Massachusetts-based research firm EPFR Global. Economic reports this week helped bolster demand for Asian currencies ahead of Lunar New Year holidays next week. “Export demand in Asia is holding up very well and regional currencies should continue to strengthen,” said Gan Kok Kim, head of treasury at OCBC Bank (Malaysia) Bhd. in Kuala Lumpur. Export Data Taiwan’s overseas sales climbed 75.8 percent in January from a year earlier, beating the median estimate in a Bloomberg News survey for a 62.9 percent increase. Shipments out of China gained 21 percent, a second monthly rise, and Philippine exports advanced 23.6 percent. Malaysia’s industrial production was up 8.9 percent in December. India’s rupee strengthened 0.5 percent in the week to 46.4945 per dollar. A government report today showed output at factories, utilities and mines increased 16.8 percent in December from a year earlier, the most since at least 1994. It beat analysts’ expectations of a 12.4 percent increase. Vietnam’s dong weakened to a record low for a second day after the central bank yesterday devalued the currency to reduce the trade deficit and the gap with black market rates. Dong Devaluation The dong fell as much as 2 percent to 19,100 per dollar, trading at the upper limit of the 3 percent band from the daily fixing, and was down 0.9 percent at 18,900 today in Hanoi, according to data compiled by Bloomberg. It dropped 2.3 percent for the week, the biggest loss since the period ended Nov. 27, when the central bank last devalued the currency. Vietnam, China and Taiwan are closed all next week for the New Year holidays, while markets in Singapore, Hong Kong and Malaysia are shut Feb. 15-16. South Korea closes Monday and reopens on Feb. 16. Elsewhere in Asian trading this week, the Philippine peso appreciated 0.6 percent to 46.245 versus the greenback and Taiwan’s dollar advanced 0.3 percent to NT$32.10. China’s yuan weakened 0.08 percent to 6.8325 in the week. --Judy Chen, Karl Lester M. Yap. With assistance from Lilian Karunungan and David Yong in Singapore. Editor: Simon Harvey, Shanthy Nambiar To contact the reporters on this story: Judy Chen in Shanghai at Xchen45@bloomberg.net; Karl Lester M. Yap in Manila at kyap5@bloomberg.net.

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