BLBG:Taiwan Dollar Drops Most in 3 Weeks, Bonds Gain on Europe Woes
Taiwan’s dollar fell the most in three weeks on concern Europe’s debt crisis will hurt Asian exports, sapping demand for emerging-market assets. Bonds rose.
The MSCI Asia-Pacific Index (MXAP) of regional shares lost 1.7 percent after Japan’s Tankan index of large manufacturers’ sentiment fell more than economists forecast and sales at major South Korean department stores declined for the first time since February 2009. Fitch Ratings downgraded five European lenders yesterday, including Credit Agricole SA, France’s second-biggest bank by assets.
“We’re seeing weaker Asian currencies as global market sentiment is in risk-off mode,” said Teck Kin Suan, an economist at United Overseas Bank Ltd. in Singapore. “Export- driven currencies such as the Korean won and the Taiwan dollar will continue to weaken into the first quarter of next year.”
The Taiwan dollar fell 0.3 percent to NT$30.37 against its U.S. counterpart in Taipei, the weakest level since Nov. 30 and the biggest loss since Nov. 23, according to Taipei Forex Inc. The island’s benchmark Taiex (TWSE) stock index dropped 2.3 percent.
Government bonds rose. The yield on the 1.25 percent bonds due September 2021 fell two basis points, or 0.02 percentage point, to 1.245 percent, prices from Gretai Securities Market show.
Taiwan’s legislature approved a plan to issue up to NT$610 billion ($20.1 billion) of government bonds with maturities of more than a year, Tang Ming-hui, deputy director-general at the Ministry of Finance’s National Treasury Agency, said yesterday.
“Bond issues next year can’t exceed the budgeted amount approved but we haven’t decided on the exact 2012 bond plan,” Tang said.
The government has sold NT$585 billion of bonds so far this year, compared with a 2011 plan to sell NT$620 billion, he said. It is scheduled to auction NT$35 billion of 10-year bonds on Dec. 26, the finance ministry said earlier.
To contact the reporter on this story: Kyoungwha Kim in Beijing at kkim19@bloomberg.net
To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net
