The nation's currency had its lowest close in two weeks on concern the central bank will sell dollars to protect exporters against Japanese rivals that have benefited from a slumping yen. Japan's yen was headed for its fifth weekly drop.
The New Taiwan dollar weakened NT$0.082 against its US counterpart to close at NT$31.699, the weakest close since March 30, on the Taipei foreign exchange market. The currency declined NT$0.102 against the greenback before noon, in line with the weakening yen and the euro.
Turnover was US$965 million, up from US$738.5 million the previous day.
The NT dollar, declining for a second week, was also under pressure from falling stock shares. Investors based outside the country sold a net NT$7.99 billion (US$252.2 million) of Taiwanese shares yesterday, more than twice the NT$3.35 billion sold on Thursday, according to Taiwan Stock Exchange data. For the week, foreign investors sold a net NT$12.74 billion of Taiwanese shares and for the month as of yesterday, NT$9.57 billion, the stock exchange said.
The Chung Hwa Institution for Economic Research (中經院) on Thursday cut its growth forecast to 4.05 percent from 4.37 percent because of sluggish export growth. Exports account for almost half of the nation's economy.
The institute predicted the NT dollar will gradually climb to NT$31.31 against the US dollar by the end of the year, appreciating 6.32 percent from last year.
If the local currency further appreciates to break NT$30 against the greenback, growth in the export sector may slow and the economy will only grow 2.51 percent for the year, it said.
The nation's exporters may find it harder to compete as the yen's slide against the US dollar lowers the cost of Japanese products abroad. The NT dollar is up 0.7 percent over the past three months and the yen down 5.8 percent.
"The central bank will probably be keen to prevent the Taiwan dollar's appreciation against currencies of Taiwan exporters' competitors," Dariusz Kowalczyk, investment strategist at CFC Securities Ltd, said in Hong Kong. "The Taiwan dollar will come under pressure."
The central bank may not want its currency to rise after the nation's second trade deficit of the year.
The Ministry of Finance on April 7 said exports rose 6.9 percent last month from a year earlier to US$15.8 billion, while imports increased 14.9 percent to US$16.2 billion, leaving a trade deficit of US$399 million.
DISMAL OUTLOOK: A Citigroup analyst predicted firms face ‘the worst semiconductor downturn in at least a decade,’ due to inventory build and the potential of a recession Semiconductor stocks tumbled after Micron Technology Inc became the latest chipmaker to warn about slowing demand, triggering concern that the industry is heading into a painful downturn. In the US on Tuesday, the Philadelphia semiconductor index sank 4.6 percent, with all 30 members in the red, its biggest drop in about two months. In Asia, chip stocks from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to Samsung Electronics Co, SK Hynix Inc and Tokyo Electron Ltd slumped. Investors are growing increasingly skittish as the notoriously cyclical industry is hurtling toward a prolonged slump after years of widespread shortages that led to heavy
With a tantalizing array of satay chicken, wok-fried mud crab and chilled tiger prawns, the dinner buffet at Singapore’s Grand Hyatt hotel typically sets diners back about US$70. Those on a tighter budget and with an eye on sustainability can fill a box for one-tenth of that price. Across Asia, tech start-ups are taking food otherwise destined for landfill and providing discounted meals through mobile phone apps. About one-third of food is lost or wasted every year globally, and the mountains of waste are estimated to cause 8 to 10 percent of greenhouse gas emissions such as methane, the UN says.
MAJOR REVENUE CONTRIBUTOR: The company said that it expects revenue this year to increase annually due to an improved smart consumer electronics outlook Hon Hai Precision Industry Co (鴻海精密) yesterday said revenue this quarter would be flat from last quarter, despite new phone models launched by key customers, as the market faces weakening demand. The iPhone assembler, based in New Taipei City’s Tucheng District (土城), said it is cautious about its business outlook, given mounting uncertainty regarding geopolitical tensions, soaring inflation and COVID-19 flare-ups, but still expects revenue this quarter to be higher than the NT$1.4 trillion (US$46.67 billion) it reported a year earlier. The forecast came as the company posted record second-quarter net profit of NT$33.29 billion, up 12 percent year-on-year from NT$29.78 billion.
Yageo Corp (國巨) yesterday said that its revenue would drop by a low single-digit percentage this quarter from a historical high last quarter, as customers and distributors are holding back demand to concentrate on inventory digestion due to flagging smartphone and notebook computer demand. The world’s biggest supplier of passive components expects to take three to six months to reduce its inventory of commoditized passive components to a normal level of 100 to 110 days, from 130 days currently. Yageo would reduce its factory utilization rate for standard passive components to about 60 percent this quarter, from about 70 percent last quarter,