Taiwan’s Dollar Advances as Yen Rise Eases Export Impact Concern

Taiwan’s dollar advanced to a one-week high as a rebound in export rival Japan’s currency tempered concern the island’s exports will decline.

The yen gained as Bank of Japan Governor Haruhiko Kuroda said the monetary authority is committed to achieving a 2 percent inflation target. Taiwan’s dollar has lost 1.5 percent this month amid a 4.7 percent slide in Japan’s currency. The Bloomberg Dollar Spot Index slipped 0.2 percent yesterday after U.S. consumer confidence unexpectedly fell to a five-month low in November even as economic growth beat estimates.

“As the yen didn’t continue weakening and the U.S. dollar couldn’t break upward, Taiwan’s dollar rose,” said Cary Ku, an economist at Jih Sun Securities Co. in Taipei. The currency may resume weakening for the rest of the year as the yen declines, China eases policy and the greenback stays strong, Ku added.

Taiwan’s dollar rose 0.1 percent to NT$30.952 against the greenback, Taipei Forex Inc. prices show. It advanced to NT$30.835, the strongest level since Nov. 19. The currency fell 0.2 percent in the last 25 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 were little changed at NT$30.921, according to data compiled by Bloomberg.

The yuan has slipped 0.2 percent this week after China, Taiwan’s largest export market, unexpectedly cut lending and deposit rates on Nov. 21. Data yesterday showed the Conference Board’s U.S. consumer confidence index fell to 88.7 this month while gross domestic product increased 3.9 percent in the third quarter, exceeding the 3.3 percent median estimate in a Bloomberg survey of analysts.

Taiwan’s government bonds gained, with the yield on notes due September 2024 dropping four basis points, or 0.04 percentage point, to 1.582 percent in when-issued trading, GreTai Securities Market prices show. That’s the lowest level for a 10-year benchmark security since Aug. 18.

U.S. Treasury yields falling below 2.3 percent and China’s rate cut contributed to Taiwan’s bullish bond market today, said Daniel Wu, a fixed-income trader at EnTie Commercial Bank.

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