Bloomberg News

Taiwan Bonds Decline on U.S. Growth Optimism; Currency Steady

November 22, 2012

Taiwan’s government bonds fell, pushing the benchmark 10-year yield to a two-week high on optimism a recovery in the world’s largest economy is gaining momentum. The currency was little changed.

The U.S. Labor Department said yesterday jobless claims decreased by 41,000 to 410,000 in the week ended Nov. 17. Taiwan’s unemployment rate held at 4.3 percent in October from a year earlier, official data showed today. Global funds has sold $426 million more Taiwanese stocks than they bought this month, exchange data show.

“We’re seeing more signs of recovery in the U.S.,” said James Wang, a fixed-income trader at Yuanta Securities Co. in Taipei. “But there won’t be much room for yields to go up a lot unless we see some strong rebound in the stock market.”

The yield on the 1.125 percent notes due September 2022 was 1.126 percent, compared with 1.121 percent yesterday, according to Gretai Securities Market. That’s the highest level since Nov. 8. The Taiex index of shares rose 0.2 percent today and has dropped 13 percent from its 2012 high reached on March 2.

Taiwan’s dollar was little changed at NT$29.185 against its U.S. counterpart, based on Taipei Forex Inc. prices. The currency touched NT$28.959 on Nov. 12, the strongest level since September 2011. One-month implied volatility was unchanged at 3.7 percent.

The overnight interbank lending rate was steady at 0.384 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.

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

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net


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