Taiwan’s dollar rose toward its December high after overseas investors boosted holdings of the island’s assets. Government bonds were little changed. Global funds bought $126 million more local stocks than they sold yesterday, taking net purchases this month to $1.5 billion, exchange data show. The yen fell to near a 27-month low today on speculation the newly-installed Prime Minister Shinzo Abe will push for further monetary stimulus to spur the economy. “Foreign funds have been coming into Taiwan’s stocks,� said Samson Tu, a Taipei-based fund manager at Uni-President Assets Management Corp., which oversees $700 million. “Japan’s easing might cause money to flow into other Asian economies.� The Taiwan dollar rose 0.3 percent to NT$29.040 against its U.S. counterpart as of 10:14 a.m. in Taipei, according to data from Taipei Forex Inc. The currency touched NT$29.019 on Dec. 3, the strongest level since Nov. 13. It has appreciated 4.3 percent this year, poised for a fourth annual gain. One-month implied volatility in the Taiwan dollar, a measure of expected moves in exchange rates used to price options, rose 13 basis points today to 3.28 percent. Taiwan’s central bank has bought the greenback to counter gains in the island’s currency on most days in the past eight months, according to traders who asked not to be identified. The monetary authority’s mandate is to keep relative exchange-rate stability and to intervene in the event of abnormal moves, Governor Perng Fai-Nan said on Dec. 19. The yield on the 1.125 percent bonds due September 2022 was little changed at 1.168 percent, according to Gretai Securities Market. Borrowing costs on benchmark 10-year bonds dropped 12 basis points in 2012. The overnight interbank lending rate was steady at 0.39 percent, a weighted average compiled by the Taiwan Interbank Money Center shows. To contact the reporter on this story: Andrea Wong in Taipei at awong268@bloomberg.net To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

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