Asian currencies, led by South Korea’s won, declined this week after a rally in regional stocks faltered on signs the global recession is far from easing.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, fell this week for the first time in a month and the MSCI Asia-Pacific Index of shares snapped a two-week rally. Europe’s economy contracted at the fastest pace in at least 13 years in the first quarter, while state-run Korea Development Institute expects the South Korean economy will shrink 2.3 percent this year, the first time in more than a decade.
“The correction we’ve seen in global equities this week probably hasn’t finished yet,” said Dariusz Kowalczyk, a strategist with SJS Markets Ltd in Hong Kong. “There’s room for further risk aversion, which would be negative for Asian emerging currencies.”
The won, Asia’s best-performing currency in the past month, declined 0.8 percent this week to 1,257 per dollar in Seoul. The Philippine peso weakened 0.8 percent to 47.635, while the Malaysian ringgit fell 0.9 percent to 3.5495.
Indonesia, Southeast Asia’s biggest economy, expanded 4.4 percent last quarter, the slowest pace in five years, the government reported on Friday. Singapore’s economy shrank the most since at least 1975 in the same quarter and Thai Finance Minister Korn Chatikavanij estimated a “pretty bloody” GDP contraction of as much as 6 percent in the same period.
The peso ended a two-week rally on speculation oil companies are purchasing dollars to pay for imports.
The New Taiwan dollar completed a fourth winning week on speculation warming relations with China will draw investment and help pull the economy out of a recession.
The currency’s gains were tempered as global funds sold US$1.1 billion more local shares than they bought this week. The benchmark TAIEX index of stocks fell 1.4 percent for the week, ending a three-week rally.
“The structural dynamics remain good for Taiwan’s dollar,” said Wai Ho Leong, a regional economist at Barclays Capital PLC in Singapore, citing prospects that Asia will lead the global economic recovery.
The selling of Taiwanese shares is likely to be temporary, he said.
The NT rose 0.3 percent this week to NT$32.950 against the US currency, according to Taipei Forex Inc. It touched NT$32.767 on Wednesday, the strongest level since Dec. 31.
Elsewhere, the Indonesian rupiah declined 0.6 percent this week to 10,438 a dollar, while Thailand’s baht jumped 0.9 percent to 34.56. China’s yuan traded at 6.8258 versus 6.8218 last Friday, while Singapore’s dollar was at S$1.4668, compared with S$1.4659.
The euro fell against the US dollar and extended a weekly loss versus the yen as the economy of the 16-nation region contracted the most in at least 13 years, raising concern the pace of recovery will be slow.
The yen extended its weekly rally against counterparts including the South African rand and Norwegian krone as a drop in stocks discouraged investors from buying higher-yielding assets funded in Japan’s currency. The euro posted its first weekly decline versus the US dollar in a month as GDP in the region shrank.
The euro slid 1.1 percent to US$1.3488 at 4:30pm in New York, from US$1.3639 on Thursday, and posted a weekly decrease of 1.1 percent. The euro lost 1.9 percent to ¥128.23 from ¥130.67 for a 4.5 percent decline this week. The US dollar dropped 0.8 percent to ¥95.07 from ¥95.80, extending its reduction this week to 3.4 percent, the biggest since October.
SECURITY: Taipei presses the US for arms supplies, saying the arms sales are not only a reflection of the US security commitment to Taiwan but also serve as a mutual deterrent against regional threats Taiwan is committed to preserving the cross-strait “status quo” and contributing to regional peace and stability, the Presidential Office said yesterday. “It is an undeniable fact that the Republic of China is a sovereign and independent democratic nation,” Presidential Office spokeswoman Karen Kuo (郭雅慧) reiterated, adding that Beijing has no right to claim sovereignty over Taiwan. The statements came after US President Donald Trump warned against Taiwanese independence. Trump wrapped up a state visit to Beijing on Friday, during which Chinese President Xi Jinping (習近平) had pressed him not to support Taiwan. Taiwan depends heavily on US security backing to deter China from carrying
The subsidiary of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in Kumamoto, Japan, turned a profit in the first quarter of this year, marking the first time the first fab of the unit has become profitable since mass production started at the end of 2024. According to the contract chipmaker’s financial statement released on Friday, Japan Advanced Semiconductor Manufacturing Inc (JASM), a joint venture running the fab in Kumamoto, posted NT$951 million (US$30.19 million) in profit in the January-to-March period, compared with a loss of NT$1.39 billion in the previous quarter, and a loss of NT$3.25 billion in the first quarter of
DRONE CENTRAL: Taiwan aims to become Asia’s democratic hub for drones, with most exports focused on high-quality military-grade models, an official said Taiwan’s drone industry is expected to expand significantly by 2030, producing 100,000 units per month and exporting half of them, the Ministry of Economic Affairs said yesterday. Current drone production capacity is about 15,000 units per month, but the industry can quickly scale up as demand increases, Industrial Development Administration Director-General Chiou Chyou-huey (邱求慧) told a news conference in Taipei. Taiwan’s drone output grew 2.5-fold last year to NT$12.9 billion (US$408.3 million) under a government program to develop the uncrewed vehicle sector, he said. The Executive Yuan in October last year approved plans to invest NT$44.2 billion into domestic production of uncrewed aerial
RESOLUTE BACKING: Two Republican senators are planning to introduce legislation that would impose immediate sanctions on China if it attempts to invade Taiwan US House of Representatives Speaker Mike Johnson on Sunday reaffirmed US congressional support for Taiwan, saying the US and “all freedom-loving people” have a stake in preventing China from seizing Taiwan by force. Johnson made the remarks in an interview with Fox News Sunday on US President Donald Trump’s summit with Chinese President Xi Jinping (習近平) last week. In an interview that aired on Friday on Fox News, just as Trump wrapped up a high-stakes visit to China, he said he has yet to green-light a new US$14 billion arms package to Taiwan and that it “depends on China.” “It’s a very good
RSS