TWD drops slightly amid decreasing yen
The China Post news staff
December 26, 2012, 12:11 am TWN
TAIPEI, Taiwan -- The New Taiwan dollar dropped slightly yesterday, despite a sharper decline of the yen that many fear may trigger a new round of currency devaluations in the region, experts said.
At the end of the session, the local currency stood at NT$29.13 against the greenback, weakening NT$0.002 from the previous session, on narrowed trade volume of US$352 million.
The anemic trade volume had to do with suspended trading in Hong Kong and South Korea, in observance of Christmas.
Yesterday, the Japanese yen weakened to 84.95 after the opening bell, the lowest since April 11, 2011, on calls made by Japan's Prime Minister-elect Abe Shinzo that the yen be kept at 90 against the greenback, as a way to boost the country's exports and economy.
Abe had even asked the Japanese central bank to "toughen up" in its effort to devalue the yen. The action has led to the currency's recent depreciation trend, which has in the process given the country's stocks a major boost.
Japan's move has triggered concerns that a currency devaluation race will begin among Asian nations, including Taiwan, which is also an export-driven economy.
Yesterday, the Central Bank of the Republic of China (Taiwan) refused to comment on what action it will take. In fact, the New Taiwan dollar yesterday rose early in the trade and stood at NT$29.046 at noon, strengthening NT$0.082 from the previous session.
According to analysts, with the local unit moving in a narrow range of NT$29.04 and NT$29.156 yesterday, they couldn't guess whether the central bank wanted the New Taiwan dollar to go up or down.