Bloomberg News

Taiwan Bonds Drop for 3rd Day, Currency Rises on Growth Optimism

February 05, 2012

Feb. 4 (Bloomberg) -- Taiwan’s government bonds dropped for a third day and the local dollar strengthened after reports that showed better-than-forecast growth in U.S. jobs, fueling optimism the global economy is recovering.

The Taiex index of shares rallied 0.9 percent after overseas investors bought $1.1 billion more Taiwanese stocks than they sold in the last five days, taking net purchases for the year to $2.1 billion, according to exchange data. The 243,000 increase in American payrolls was the most since April and exceeded all forecasts in a Bloomberg News survey. The unemployment rate of the world’s biggest economy dropped to 8.3 percent, the lowest since February 2009. The island’s financial markets were open today to make up for an extended Lunar New Year holiday last week.

“The U.S. job data was a huge boost to equities, and encouraged risk-taking sentiments today,” said James Wang, a fixed-income trader at Yuanta Securities Co. in Taipei. “The recent rallies in Taiwan stocks have put pressure on government bonds to decline.”

The yield on the government’s 1.25 percent notes due September 2021 rose to 1.283 percent from 1.279 percent yesterday, prices from Gretai Securities Market show.

The Taiwan dollar strengthened 0.1 percent to NT$29.525 against its U.S. counterpart, according to Taipei Forex Inc. The currency touched NT$29.415 earlier, the strongest level since Sept. 13.

The overnight money-market rate, which measures interbank funding availability, slipped one basis point to 0.396 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.

--Editors: Jim McDonald

To contact the reporter on this story: Andrea Wong in Taipei at awong268@bloomberg.net

To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net


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