SINGAPORE: Investors’s search for higher yields pushed most emerging Asian currencies higher on Tuesday as expectations of monetary stimulus by major central banks may offset a possible interest rate hike by the US Federal Reserve within this year.

China’s yuan, however, edged down as producer price deflation moderated further, supporting views that the central bank may be in no hurry to cut interest rates soon.

The South Korean won raced to a near 14-month high, extending gains after Standard & Poor’s on Monday raised the country’s sovereign rating to AA from AA-.

Taiwan’s dollar hit its strongest in more than one year on stock inflows and exporters.

Bank of England policymaker Ian McCafferty wrote in an op-ed for The Times newspaper that more quantitative easing was likely to be required if the U.K.’s economic decline worsens. The British central bank last week cut interest rates to a record low of 0.25 percent and unleashed billions of pounds of stimulus.

Such additional liquidity may help investors add higher-yielding assets in emerging Asia although the possibilities of the Fed tightening this year slightly increased after strong US jobs data leased on Friday.

“Given ample liquidity, the Fed is not a factor to unwind carry trades but just a reason for caution,” said Jeong My-young, Samsung Futures research head in Seoul. Analysts at Bank of America Merrill Lynch noted the search for yield had led to the largest 5-week inflow on record to emerging market debt funds and the longest inflow streak to equity funds in two years.

The won gained 0.3 percent to 1,105.4 per dollar, its strongest since June 25 2015.

The South Korean currency found support from continuous equity inflows and demand of exporters for settlements. The recent demand for Seoul shares among foreign investors helped the won to become the second best-performing emerging Asian currency so far this year after Malaysia’s ringgit.

Caution heightenend over possible intervention by the foreign exchange authorities to keep the won weaker than the psychologically important 1,100, traders said.

With such caution, importers purchased dollars for payments on dips. The Taiwan dollar rose 0.4 percent to 31.400 per the US dollar, its strongest since July 24, 2015. Foreign investors were net buyers in the island’s stock market in the previous three straight sessions.

Local exporters bought the Taiwan dollar around 31.500.

The central bank has not been spotted curbing the currency’s strength yet, traders said, while caution over such intervention grew.—Reuters