SINGAPORE -- Asian currencies climbed Tuesday as investors were encouraged by a stronger yuan and expectations that regional authorities would use their currencies to try to tame inflation.

The South Korean won rose 1.7 percent thanks to dollar-selling intervention by authorities who were supporting the currency to cushion the economic blow of rising import prices, dealers said.

Singapore, Taiwan and China have been using their currencies to counter the soaring import cost of raw materials and food.

A weak dollar provided some support for regional currencies. The dollar fell against the euro and the yen as doubts surfaced about how aggressive the Federal Reserve would be in raising rates.

Record-high euro zone inflation reported on Monday bolstered expectations that the European Central Bank would raise rates next month.

China's yuan hit its highest level since the currency's revaluation in July 2005 after the central bank set a fresh high for the mid-point rate that sets the tone for the day's trading.

The yuan rose by a tenth of a percent to 6.8918 versus the dollar. It has risen by 6.0 percent so far this year.

The Taiwan dollar inched up by a fifth of a percent to 30.321 per US dollar, rebounding from a 2-1/2-week low hit in the previous session.
The South Korean won jumped from the previous day's close to 1,021.6 per dollar, its highest in nearly two weeks, as traders said they suspected the central bank had intervened to sell dollars.

"Even though all economic factors support the won to depreciate against the dollar, the central bank's main concern is to control inflation and they keep intervening," trader Nam Kyu Kim at ING in Seoul said.

Verbal intervention also occurred as a senior finance ministry official said authorities planned to take stern measures to manage the won and support the country's policy of keeping prices stable.

Traders also suspected intervention in the Indonesian rupiah. The central bank was seen selling dollars to support the currency around 9,325 per dollar.

The Malaysian ringgit rose by 0.6 percent to 3.2545 per dollar, its highest in 1-½ weeks.

"The dollar/ringgit saw good selling since early morning, and it might be due to market talk of possible future hikes in Malaysia's interest rates," a trader in Kuala Lumpur said.

Analysts at ING said Malaysia's central bank would raise its policy rate of 3.5 percent by 25 basis points in July.

However, Malaysia's central bank chief on Monday gave no hint of such a move. She said interest rates might not need to rise if inflation tapered off in line with forecasts later in the year.

The ringgit was also buoyed by the Singapore dollar, which rose by 0.7 percent to 1.3670, touching a one-week high.