Asian currencies fell this week, led by South Korea’s won and the Philippine peso, as a major earthquake in Japan spurred demand for dollars and yen, while signs the global recovery is losing steam deterred risk-taking.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-traded currencies excluding the yen, declined 0.2 percent for the week. An 8.9-magnitude earthquake yesterday, the strongest ever recorded in Japan, prompted a slump in regional stocks. Overseas investors sold $2.8 billion more South Korean and Taiwanese stocks than they bought this week, exchange data show. The yen strengthened the most since Dec. 3 on safe- haven demand.

“The impact from the earthquake could result in slower external trade as Japan is traditionally one of the top three markets for Asian exporters,” said Suresh Kumar Ramanathan, a currency strategist at CIMB Investment Bank in Kuala Lumpur. “Also, if growth in China cools off further, it could chip away some of the recent gains in Asian currencies.”

South Korea’s won dropped 0.9 percent from a week earlier to 1,124.18 against the dollar, according to data compiled by Bloomberg. The Philippine peso slipped 0.9 percent to 43.65. Taiwan’s dollar and India’s rupee each fell almost 0.5 percent to NT$29.599 and 45.1825, respectively.

“The earthquake raised concern some economic activities will be halted in Japan,” said Tsutomu Soma, a bond and currency trader at Okasan Securities Co. in Tokyo yesterday. Sony Corp., Toyota Motor Corp. and Canon Inc. are among companies that suspended production in factories affected by the temblor.

Faltering Global Growth

Reports on March 10 showed U.S. jobless claims rose, China had its first monthly trade deficit in almost a year and Moody’s Investors Service cut Spain’s credit rating. Crude oil reached a 29-month high on March 7 as a civil war in Libya disrupted supplies and Saudi Arabia quelled protests.

First-time claims for jobless benefits rose to 397,000 in the week ended March 5 from a revised 371,000 the previous week, the U.S. Labor Department said. China posted a trade deficit of $7.3 billion in February, compared with the median forecast for a $4.9 billion surplus in a Bloomberg survey.

China and the U.S. are the biggest markets for exports from the region. Overseas shipments account for about half of South Korea’s economy and two-thirds of Thailand and Taiwan’s gross domestic product. China’s yuan fell 0.1 percent this week to 6.5746.

Oil Pressure

Malaysia’s ringgit dropped to its lowest level since March 2 after the central bank held its overnight policy rate at 2.75 percent for a fourth straight meetings, a decision predicted by 16 of 20 economists in a Bloomberg survey. Four had expected a 25-basis point increase.

Bank Negara doubled the statutory reserve ratio to 2 percent, requiring banks to set aside zero-interest money with the central bank from April 1, to tighten credit. It had slashed the ratio to 1 percent in March 2009 from 4 percent in November 2008 after the global credit-market crisis.

The currency declined 0.6 percent on the week to 3.0460 per dollar, the biggest drop in a month.

Oil prices fell 3.1 percent to $101.16 a barrel in New York, paring its rally over the past three weeks to 15 percent. The price reached $106.95 on March 7, the highest level since September 2008.

“Traders are more concerned about a sell-off in the equities markets in Asia, with the supply of oil potentially being disrupted in Saudi Arabia,” said Godwin Chan, a foreign- exchange trader at OSK Investment Bank Bhd. in Kuala Lumpur.

Elsewhere, the Singapore dollar fell 0.5 percent for the week to S$1.2736 against its U.S. counterpart, according to data compiled by Bloomberg. Indonesia’s rupiah depreciated 0.2 percent to 8,803 while Thailand’s baht gained 0.1 percent to 30.46.

Bloomberg