EM ASIA FX-Won drives Asia FX lower on N.Korea, yen; Taiwan dlr at 8-mth low

* N.Korea may be preparing new nuclear test - Seoul * Offshore funds, custodian banks hit S.Korean won * Taiwan dollar down on foreign selling * Philippine peso at 5-mth low on bond profit-taking (Adds text, updates prices) By Jongwoo Cheon SINGAPORE, April 8 (Reuters) - The South Korean won hit its lowest level in more than eight months on Monday, leading slides among emerging Asian currencies, due by pressures from increasing geopolitical tension with the North and the weakening yen. The Taiwan dollar touched an eight-month nadir on foreign financial institutions' selling, while the Philippine peso fell to its lowest in nearly five months on continuous profit-taking in bonds. Offshore funds sold the won, while custodian banks joined the offers as foreign investors continued to dump Seoul shares. The won fell 0.7 percent to 1,140.2 per dollar in local trade, its weakest since July 27. That came even as some traders suspected intervention by foreign exchange authorities in Seoul to support the won. "The won's weakness became a trend once it weakened past 1,135," said Lee Jin-woo, research head at NH Investment & Futures in Seoul. While some analysts still expect the won to appreciate in the long-term, it is difficult to maintain such optimism, said Lee, adding "There are few technical support lines for now." Technically, the South Korean unit is seen heading to 1,153-1,155, levels last seen in July, analysts said. Movement around an atomic test site in North Korea indicates the reclusive state may stage another nuclear test, a South Korean minister said on Monday, an act that would further escalate tensions on the Korean peninsula. On top of the geopolitical tension, the won came under further pressure on Monday as the yen hit fresh lows against a host of major currencies after the Bank of Japan lost no time in launching its new easing policy to underline determination to beat deflation. A weaker yen stemming from the policy hit some of emerging Asian currencies - especially the won and the Taiwan dollar - as it is seen hurting their export competitiveness, analysts and traders have said. Foreign investors extended their selling spree on the main Seoul stock market for a fourth consecutive session. They have dumped a combined net 1.7 trillion Korean won ($1.5 billion) during the period, according to the Korea Exchange. TAIWAN DOLLAR The Taiwan dollar lost as much as 0.5 percent to 30.090 per U.S. dollar, its weakest since Aug. 3 as heightened tensions on the Korean peninsula along with fears about the spread of bird flu in China hurt risk appetites. Weak U.S. jobs data added to the pessimism. "The Taiwan dollar fell mainly as the Korean won and the Japanese yen depreciated. Concerns over the North Korea situation and weaker stocks also weighed on it," said a Taiwan bank trader in Taipei. The benchmark stock index dropped 2.4 percent as investors fretted about the possible impact of a new strain of bird flu in China on cross-strait trade and domestic demand in the island. Taiwan's central bank was spotted buying the Taiwan dollar to limit its downside when the currency was weaker than 30.050, while domestic exporters bought it for settlements when it was softer than 30.000, traders said. "A crack of 30.000 opens 30.200 because of a weak yen and a general setback to risk-taking with poor U.S. data," said BNP Paribas currency strategist Thio Chin Loo in Singapore. The Taiwan dollar has eased 2.9 percent against the greenback this year, while the yen and the won have lost 12.2 percent and 6.1 percent respectively, according to Thomson Reuters data. The relative outperformance of the Taiwan dollar prompted expectations that the central bank may drive the currency to depreciate more, traders have said. But the authority is still unlikely to let the Taiwan dollar fall too sharply, traders in Taipei said. "Most players are used to the central bank's 'dynamic stability'," said a foreign bank trader in Taipei, referring to its pattern of only allowing a certain level of currency movement to make sure all parties including exporters and importers do not get hurt. PHILIPPINE PESO The Philippine peso fell as much as 0.4 percent to 41.315 to the dollar, its weakest since Nov. 16, according to Thomson Reuters data. Investors continued to take profit from the country's bonds, while tensions with North Korea dented investor confidence in the relatively risky local currency, traders said. "There's a possibility for the peso to weaken to between 41.50 to 42.00," said Alan Cayetano, Bank of the Philippine Islands' head of FX trading in Manila. "Positioning has been highly skewed in favour of long peso over a long period in expectation of the investment grade rating upgrade. Now that it's there, its time to lock in profits and wait for the next wave," said Cayetano. In 2012, the peso was the No. 2 performer in emerging Asia - after the won - with a 6.8 percent gain to the dollar, Thomson Reuters data showed. This year, the peso has lost 0.6 percent. Earlier this year, the Philippine currency enjoyed inflows for stocks and bonds on stronger economic fundamentals and a ratings upgrade hopes, but some investors took profits after Fitch Ratings raised the country to an investment grade on March 27. The 10-year government bond yield rose to 3.435 percent from 3.293 percent on April 1, while the 5-year yields rose to 3.050 percent from 3.020 percent on April 1. Some analysts said the peso is expected to rebound on the country's sound economic fundamentals and sustained remittance inflows. Technically, the peso is seen as oversold with the 14-day dollar/peso relative strength index at 71.3, above the threshold of 70. The analysts suggested adding bullish positions on the peso at 41.28, a notch weaker than the 38.2 percent retracement of its appreciation between August and March. Despite some profit-taking in bond market, Philippine stocks have seen ongoing inflows. Foreign investors bought a combined net 1.5 billion pesos ($36.4 million) of stocks in the first five days of April, increasing their cumulative net buying this year to 41.4 billion pesos, according to Philippine Stock Exchange data. CURRENCIES VS U.S. DOLLAR Change on the day at 0751 GMT Currency Latest bid Previous day Pct Move Japan yen 98.90 97.56 -1.35 Sing dlr 1.2410 1.2400 -0.08 Taiwan dlr 30.008 29.925 -0.28 Korean won 1140.21 1131.80 -0.74 Baht 29.28 29.30 +0.07 Peso 41.28 41.16 -0.29 Rupiah 9755.00 9745.00 -0.10 Rupee 54.64 54.81 +0.31 Ringgit 3.0580 3.0575 -0.02 Yuan 6.2045 6.2010 -0.06 Change so far in 2013 Currency Latest bid End prev year Pct Move Japan yen 98.90 86.79 -12.24 Sing dlr 1.2410 1.2219 -1.54 Taiwan dlr 30.008 29.136 -2.91 Korean won 1140.21 1070.60 -6.11 Baht 29.28 30.61 +4.54 Peso 41.28 41.05 -0.56 Rupiah 9755.00 9630.00 -1.28 Rupee 54.64 54.99 +0.65 Ringgit 3.0580 3.0580 -0.00 Yuan 6.2045 6.2303 +0.42 * Financial markets in Thailand were closed for a holiday on Monday. ($1 = 1131.6250 Korean won) ($1 = 41.1650 Philippine pesos) (Additional reporting by Lee Kyoung-ho in SEOUL, Miao-jung Lin in TAIPEI, Saikat Chatterjee in HONG KONG and Reuters FX Analyst Rick Lloyd; Editing by Richard Borsuk)