The yen slumped to the lowest in more than six months against the US dollar on speculation that Japanese elections next month would hand power to an opposition party that advocates more aggressive monetary stimulus.
The Japanese currency weakened versus all of its 16 most-traded counterparts as Japanese Prime Minister Yoshihiko Noda said he would dissolve parliament, paving the way for elections that polls shows his Democratic Party of Japan would lose.
The euro gained against its US peer for the first time in four weeks after touching a two-month low. The pound fell to a 10-week low versus the greenback as data showed UK retail sales slid.
“Economic data globally has been weak,” Greg Anderson, the North American head of G10 currency strategy at Citigroup Inc in New York, said in a telephone interview. “Rising concerns that we are in a second-dip recession, maybe not in the US, but in Japan and the eurozone, has weighed on market sentiment all week long.”
The yen depreciated 2.3 percent to ￥81.32 per US dollar in New York this week, its biggest drop since February. The Japanese currency declined 2.5 percent to ￥103.60 per euro, its most pronounced fall since September. The euro added 0.2 percent to US$1.2743.
The dollar gained against the majority of its most-traded peers this week as a haven play on speculation US President Barack Obama and congressional lawmakers would be unable to avoid the fiscal cliff.
The Dollar Index, which measures the currency against the euro, yen, pound, Swiss franc, Canadian dollar and Swedish krona, ended the week up 0.2 percent at 81.192, after touching the highest level since Sept. 5.
Britain’s pound fell on Thursday to its lowest level since Sept. 5 after data showed retail sales, including fuel, dropped 0.8 percent last month from September, when they gained a revised 0.5 percent. The median forecast in a Bloomberg News survey was for a 0.1 percent decline.
Sterling declined 0.1 percent to US$1.5888 after touching US$1.5829. It slid 0.3 percent to ￡0.8017 per euro.
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
United Microelectronics Corp (UMC, 聯電) expects its addressable market to grow by a low single-digit percentage this year, lower than the overall foundry industry’s 15 percent expansion and the global semiconductor industry’s 10 percent growth, the contract chipmaker said yesterday after reporting the worst profit in four-and-a-half years in the fourth quarter of last year. Growth would be fueled by demand for artificial intelligence (AI) servers, a moderate recovery in consumer electronics and an increase in semiconductor content, UMC said. “UMC’s goal is to outgrow our addressable market while maintaining our structural profitability,” UMC copresident Jason Wang (王石) told an online earnings
MARKET SHIFTS: Exports to the US soared more than 120 percent to almost one quarter, while ASEAN has steadily increased to 18.5 percent on rising tech sales The proportion of Taiwan’s exports directed to China, including Hong Kong, declined by more than 12 percentage points last year compared with its peak in 2020, the Ministry of Finance said on Thursday last week. The decrease reflects the ongoing restructuring of global supply chains, driven by escalating trade tensions between Beijing and Washington. Data compiled by the ministry showed China and Hong Kong accounted for 31.7 percent of Taiwan’s total outbound sales last year, a drop of 12.2 percentage points from a high of 43.9 percent in 2020. In addition to increasing trade conflicts between China and the US, the ministry said
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