Taiwan Bond Yield Rises to Highest Since 2009 on U.S. Job Growth

Taiwan’s five-year bonds fell for a fourth day, sending the yield to the highest since 2009, on speculation growth in U.S. payrolls will sap demand for debt.

Ten-year Treasury yields jumped six basis points yesterday after ADP Research Institute’s employment data topped the forecasts of all 47 economists surveyed by Bloomberg, fueling optimism the world’s largest economy is gaining momentum. The Labor Department’s report today may show U.S. companies added 215,000 jobs in June, the fifth monthly increase above 200,000, according to the median estimate in a Bloomberg survey.

“Yesterday’s ADP data was very good, so investors that bought Taiwan’s bonds for short-term trading were worried the non-farm payrolls report may also be strong, which would cause Treasury yields to jump,” said Daniel Wu, a Taipei-based fixed-income trader at EnTie Commercial Bank.

The yield on government notes due July 2019 climbed three basis points, or 0.03 percentage point, to 1.255 percent, prices from GreTai Securities Market show. That’s the highest level for a benchmark of that maturity since January 2009.

The island’s dollar depreciated 0.1 percent to NT$29.935 against its U.S. counterpart, according to prices from Taipei Forex Inc. One-month non-deliverable forwards weakened 0.1 percent to NT$29.892, data compiled by Bloomberg show.

One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, increased one basis point to 2.55 percent.

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