Asian currencies weakened the most in 10 months last month as slowing economic growth and the prospect of higher US interest rates spurred outflows.
The won led declines, falling 4.7 percent in its biggest monthly drop since 2011. Thailand’s baht lost 4.2 percent and the New Taiwan dollar depreciated 1.9 percent to NT31.601 to the US dollar. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 major currencies excluding Japan’s yen, fell 1.4 percent.
Taiwan’s GDP increased by the least since 2012’s last quarter, a report showed on Friday, and expansion in South Korea was the slowest in more than two years. A gauge of Chinese manufacturing fell to a 15-month low last month, fueling concern a slowdown in Asia’s largest economy has not bottomed out yet.
“There isn’t a single good story coming out of Asia,” said Nizam Idris, head of currency and fixed-income strategy at Macquarie Bank Ltd in Singapore. “Growth is decelerating, exports are weak and reforms have disappointed. Asia is likely to remain pretty downbeat for some time unless you see a big turnaround in China or improving trade numbers.”
Foreign funds sold a net US$4 billion of South Korean, Taiwanese and Thai shares last month, data compiled by Bloomberg show.
Of eight major Asian stock markets, India was the only one that did not experience outflows.
The Federal Open Market Committee said this week that the US job market is solid, dropping the modifier “somewhat,” which boosted bets the US will start raising interest rates this year. The first 25-basis point increase will probably happen next month, Idris said.
The yuan fell 0.14 percent last month, its biggest monthly loss since February, after the Chinese State Council said last week that the nation will make the currency more flexible. That spurred speculation the trading band might be widened. Authorities have been struggling to cope with an equities rout that saw the Shanghai Composite Index plunge almost 30 percent from a mid- June peak.
“The stock rout added depreciation pressure on the yuan as it hurts market sentiment and has spillover effects on all asset classes,” Singapore-based Oversea-Chinese Banking Corp Tommy Xie said.
The ringgit fell 1.4 percent this month and reached a 16- year low as a political scandal linked to a probe into the finances of debt-ridden state investment company 1Malaysia Development Bhd. damaged sentiment toward the country.
Elsewhere in Asia, Indonesia’s rupiah weakened 1.5 percent last month and the Philippine peso dropped 1.4 percent. India’s rupee declined 0.8 percent and Vietnam’s dong was little changed.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy