Taiwan’s Dollar Jumps on Increased Foreign Inflows

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Taiwan’s Dollar Jumps on Increased Foreign InflowsThe Taiwan’s dollar rose the most in 17 months as global investors purchased more local stocks than they sold while the Japan’s yen jumped after the Bank of Japan retained its unprecedented monetary stimulus.

Offshore funds bought an extra $547 million of the island’s shares, the largest such inflow in 18 months. The Taiwan’s currency was trading 0.5 percent higher at NT$31.553 versus the U.S. currency, according to Taipei Forex Inc.’s data. This tied an appreciation on Jan. 16, which was the strongest since Aug. 5, 2013.

The yen rose 0.9 percent after the BOJ announced plans to continue boosting the monetary base by 80 trillion yen (679 billion) annually.

The Taiwan’s dollar usually monitors the yen since Japanese exporters usually compete with their Taiwanese peers.

“The yen rose after the BOJ decision,” said Cindy Yu, a Taipei-based economist at Taipei Fubon Commercial Bank Co, told Bloomberg News. “Foreign investors are also buying Taiwan’s stocks. Sentiment is quite positive now, with Chinese stocks rebounding and investors waiting for an announcement on stimulus by the European Central Bank.”

Meanwhile, the Malaysia’s ringgit continued with its three-month losing streak, which has seen it shed 10 percent, making it Asia’s biggest loser, after the government expanded its fiscal deficit forecast, prompting Fitch Ratings to issue a warning of an imminent downgrade in its credit rating.

The ringgit fell 0.3 percent to trade at 3.6172 per dollar in Kuala Lumpur. It also plunged to 3.6277, its weakest level since April 2009 after Prime Minister Najib Razak on Tuesday increased this year’s deficit estimate to 3.2 percent of the gross domestic product due to falling crude prices, up from 3 percent earlier. Crude is Malaysia’s biggest export. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com