Oct. 24 (Bloomberg) -- Taiwan’s dollar gained the most in a week and government bonds declined after a report showed China’s manufacturing may expand for the first time in four months, buoying demand for riskier assets such as emerging-market stocks.
The MSCI-Asia Pacific Index of regional shares rallied for a second day after an index released by HSBC Holdings Plc and Markit Economics showed a preliminary Chinese manufacturing index was 51.1 for October, greater than the 50 threshold that indicates expansion. European leaders outlined plans to aid banks over the weekend, heading toward a revamped strategy to contain the region’s debt crisis.
“Investors are quite happy there was some progress made in Europe over the weekend,” said Ivy Leung, a Taipei-based fixed- income trader at Polaris Securities Co.
Taiwan’s dollar advanced 0.6 percent to NT$30.133 against its U.S. counterpart, according to Taipei Forex Inc. The yield on the 2 percent bonds due July 2016 rose three basis points, or 0.03 percentage point, to 1.079 percent, prices from Gretai Securities Market show. That’s the biggest rise since Sept. 21.
“Five-year yields will continue to trade within a relatively narrow range until we get a clearer sign of the market’s long-term direction,” Leung said.
Taiwan’s industrial production advanced 1.6 percent from a year ago in September, the slowest pace of gains in two years, the government reported toward the end of currency trading today. Economists surveyed by Bloomberg forecast a 6.1 percent increase.
The overnight money-market rate, which measures interbank funding availability, was steady at 0.396 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.
--Editors: Andrew Janes, Ven Ram
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