Taiwan’s dollar rose to its highest level in one month after global funds bought more local stocks while Japan retained its monetary stimulus.
The currency advanced 0.1 percent to trade at NT$31.510 versus its U.S. peer, according to Taipei Forex Inc.’s data. It had earlier hit NT$31.364, its highest level since Dec. 19. The one-month non-deliverable forwards surged 0.2 percent to trade at NT$31.427. The yen remained slightly unchanged versus the dollar.
“Foreign investors may be remitting their funds into Taiwan because net purchases of stocks have increased recently,” Andrew Tsai, a Taipei-based economist at KGI Securities Co., told Bloomberg News. “There is some speculation that Japan won’t expand its stimulus further.”
The Taiex index extended its gains for the fourth straight day as foreign investors sunk $379 million into local stocks, bringing the net purchases so far this week to $1.5 billion. The yen went up 0.7 percent on Wednesday after the Bank of Japan announced plans to retain its monetary base at 80 trillion yen (678 billion) on an annual basis.
The yen and the Taiwan’s dollar closely monitor each other as exporters in both countries aggressively compete in international markets.
The yield on government notes that mature in September 2024 rose 0.01 percentage point, or one basis point, to 1.542 percent.
Meanwhile, the offshore yuan advanced for the fourth day after key senior Chinese officials announced that the country won’t be much affected by growth in 2014, the weakest in 24 years.
Speaking in Davos, Chinese Premier Li Keqiang on Wednesday announced that whilst the economy may face turbulence this year, no systemic risk is expected and that the government will take the necessary measures to boost the quality of growth in order to ensure the economy grows as projected. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Yashu Gola at email@example.com