The US dollar yesterday held close to a six-month peak, as jitters over China and global growth weighed on risk appetite, while the yen strengthened as Japan’s top currency diplomat sent a warning about the currency after it earlier dropped to a 10-month low.
The yen rose by as much as 0.4 percent to ￥147.02 per US dollar after Japanese Vice Minister of Finance for International Affairs Masato Kanda said the ministry would not rule out options if speculative moves persist, the strongest warning since last month.
Kanda has been the central figure in the nation’s efforts to stem the sharp decline of the yen since last year.
Photo: Reuters
The yen has hovered at about the key ￥145-per-US dollar level for the past few weeks. As of 8:13am GMT, it stood at ￥147.47 per US dollar, compared with ￥147.82 earlier in the session, which was its lowest since Nov. 4 last year.
“The remarks suggest that intervention could be imminent with the yen in the intervention zone we saw last year,” ING Groep NV global head of markets Chris Turner said.
Japan intervened in currency markets 12 months ago when the US dollar rose past ￥145, prompting the Ministry of Finance to buy the yen and push the pair back to about ￥140.
“I think we’ll probably see intervention, but that doesn’t necessarily mean the underlying trend will turn around any time soon,” Turner said, citing the US dollar’s ongoing strength.
Against a basket of currencies, the US dollar was at 104.77, not far off the six-month high of 104.90 touched on Tuesday. Economic data from China and Europe on Tuesday fanned some fears of slowing global growth, pushing investors to scramble for the greenback.
“Dollar strength remains the dominant play,” Oversea-Chinese Banking Corp currency strategist Christopher Wong (黃經隆) said in Singapore.
Higher-for-longer US interest rates and the relative US growth resilience are supporting the greenback, Wong said.
The euro was up 0.1 percent at US$1.0733, having fallen to a three-month low of US$1.0705 on Tuesday. Sterling was last at US$1.2559. It also touched a three-month low of US$1.25285 on Tuesday.
The New Taiwan dollar yesterday fell against the US dollar, down 0.23 percent to close at NT$31.967, while the Chinese yuan fell to a 10-month low against the greenback before paring some losses as state banks stepped in to offer support.
Similar currency defense measures exist elsewhere in Asia. Taiwan’s foreign exchange reserves declined last month for the first time in nearly a year, as the monetary authority intervened in the market.
In Thailand, the central bank has warned that rapid moves in the baht would prompt intervention.
Still, skepticism remains whether these measures are game changers in the absence of a less hawkish US Federal Reserve or a pickup in China’s economy.
Additional reporting by Bloomberg
Taiwan’s technology protection rules prohibits Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) from producing 2-nanometer chips abroad, so the company must keep its most cutting-edge technology at home, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the remarks in response to concerns that TSMC might be forced to produce advanced 2-nanometer chips at its fabs in Arizona ahead of schedule after former US president Donald Trump was re-elected as the next US president on Tuesday. “Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” Kuo said at a meeting of the legislature’s
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
RSS