A stronger Japanese economy will benefit its Asian neighbors in the long run, but a weakening yen could have mixed effects for other Asian currencies in the short term, analysts said yesterday.
“The Japanese currency has been too strong for too long,” said Geoffrey Lunt, a Hong Kong-based fixed income specialist at HSBC Global Asset Management Ltd.
A value correction for the yen is a reasonable move for Japan as the Japanese government seeks to boost its economy and achieve an inflation target of 2 percent, Lunt said.
South Korea, which has benefited from a strong yen in recent years, is going through adjustments as the yen depreciation pans out, as are a number of other countries in Asia, Lunt said.
As of yesterday, the yen had declined 14 percent this year, while the South Korean won and the New Taiwan dollar had weakened 6 percent and 3 percent respectively, said a local currency analyst, who asked not to be named.
The analyst expects the local currency to trade at about NT$30 in the near term after closing at NT$29.98 versus the greenback in Taipei trading yesterday, saying that the central bank would not tolerate drastic volatility.
On the other hand, the Thai baht has picked up 3.3 percent so far this year on the back of fund inflows seeking to take advantage of Thailand’s close trade relations with Japan, Lunt said.
As Japan is one of the world’s largest economies, “a faster Japanese recovery will help drive the region and the world as a whole, the way China and the US do,” he said.
National Taiwan University economics professor Kenneth Lin (林向愷) said yesterday that a weaker yen would help reduce costs for Taiwanese importers, given their heavy dependence on Japanese raw materials and consumer goods.
However, it is too early to judge the overall impact of the depreciation of the yen because Japan could develop into more of a direct trading rival as a result, he said by telephone.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to