Taiwan’s Dollar Falls to Four-Year Low as Yen Extends DeclineJustina Lee
Taiwan’s dollar fell to a four-year low on concern the island’s exports will be hurt by a sliding yen after the Japanese economy entered a recession.
The yen slumped 4.3 percent this month to a seven-year low today after Japan reported a second straight contraction in gross domestic product last quarter and Prime Minister Shinzo Abe delayed a sales-tax increase. South Korea’s won dropped to the weakest since September 2013. Taiwan’s manufacturers compete in global markets with Korean and Japanese counterparts.
“The yen is still steadily depreciating, so other Asian currencies will feel the pressure to follow,” said Andrew Tsai, an economist at KGI Securities Co. in Taipei.
Taiwan’s dollar depreciated 0.3 percent to NT$30.876 against its U.S. counterpart, the weakest level since December 2010, Taipei Forex Inc. prices show. The currency slipped 0.2 percent in the last 29 minutes of trading. The central bank has sold the local dollar in the run-up to the close on most days since March 2012, according to traders who asked not to be identified.
One-month non-deliverable forwards dropped 0.4 percent, the most since September, to NT$30.846, according to data compiled by Bloomberg.
In the bond market, the yield on the island’s 1.25 percent sovereign notes due October 2019 was little changed at 1.136 percent, GreTai Securities Market prices show.