Thu, Oct 12, 2006 - Page 11 News List

NT dollar, markets react to N Korean nuclear test

AGENCIES , TAIPEI

Following a weaker Japanese yen, the New Taiwan (NT) dollar weakened to its lowest point in 10 months against its US counterpart over concerns that North Korea's first announced nuclear test will lead to reduced investments in Asia.

Shares rose slightly yesterday, led by rubber issues on falling oil prices.

Opening after a five-day holiday, the Taiwanese financial markets reacted to the Oct. 9 report of the underground nuclear test by Kim Jong-il's regime.

"The Taiwan dollar's really playing catch-up with similar moves in the region, given there's concern for the region with the North Korea tests," said Claudio Piron, a currency strategist at JPMorgan Chase & Co in Singapore.

People are now thinking again about the risk in the region. "That's pushing the Taiwan dollar lower," Piron added.

The NT dollar slid NT$0.197 to close at NT$33.29 against the US dollar, the biggest decline since June 8 and the lowest close since Dec. 14, according to Taipei Forex Inc.

The nation's central bank said on Tuesday that it would maintain an orderly forex market when domestic trading resumed yesterday.

On the local bourse, share prices closed 0.13 percent higher, driving the benchmark index past a psychological resistance level of 7,000 points for the first time since May, dealers said.

The TAIEX closed up 9.43 points at 7,006.67, on turnover of NT$97.27 billion (US$2.93 billion).

It was the highest close since the 7,074.15 points recorded on May 19.

Risers led decliners 641 to 505, with 112 stocks unchanged.

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