US dollar ends trade at NT$29.668 in Taipei
February 2, 2013, 12:05 am TWN
TAIPEI -- The U.S. dollar rose against the New Taiwan dollar Friday, gaining NT$0.086 to close at the day's high of NT$29.668 as traders took hints from the weakness of other regional currencies to cut their holdings in the local unit, dealers said.
The declines of the regional currencies were fueled by a fall in the Japanese yen on speculation that the Bank of Japan (BOJ), the Japanese central bank, will pump more funds into the market to drag down its currency, they said.
In Taiwan, the U.S. dollar was further lifted through intervention by the country's central bank to keep the local currency competitive with that of regional export rivals, they said.
The greenback opened at NT$29.585 and moved to an early low of NT$29.520 before rebounding. Turnover totaled US$989 million during the trading session.
The U.S. dollar got a boost across the Asian market after the Japanese yen further weakened Friday, hitting 92.30 yen to the U.S. dollar, a two and a half year low, dealers said.
The yen's weakness resulted from market speculation that Japanese Prime Minister Shinzo Abe will soon select a new BOJ governor who could extend the bank's efforts to stimulate the economy by injecting more liquidity into the market.
The BOJ's current round of monetary easing has caused the yen to plunge against the currencies of its Asian competitors recently, and dealers said another liquidity injection would only add to the downward pressure on the yen.
The depreciation of Japan's currency, which was trading at 82.5 to the greenback as recently as Dec. 11, 2012, has triggered a currency battle among central banks of several export-oriented countries, such as Taiwan and South Korea.
Those countries fear losing their global competitive edge if they fail to intervene to weaken their currencies against the U.S. dollar, they said.
In addition to the New Taiwan dollar, other currencies in Asia trended lower against the U.S. dollar in Friday trading.
Seizing on the weakness in regional currencies, Taiwan's central bank stepped in late in the session, as it has repeatedly in recent weeks, to buy the U.S. dollar, dealers said.