Hot Money Chases Taiwan Stocks to New Highs, New Taiwan Dollar Surges 1.17 Cents to Close at NT$31.488

Central News Agency

(CNA Taipei, May 6, comprehensive foreign report) -- Taiwan's bull market continued today, breaking through 41,000 points and setting a new record, attracting a large influx of hot money. The New Taiwan Dollar exchange rate also sharply appreciated, closing today at NT$31.488, a strong surge of 1.17 cents. The total transaction amount in the Taipei and Yuan Tai foreign exchange markets expanded to US$2.7205 billion.

Taiwan stocks today, led by strong performances from heavyweight stocks like TSMC, Delta Electronics, and MediaTek, pushed the index to a new high of 41575.84 points, closing at 41138.85 points, also a new closing high. Foreign investors also increased their net purchases, buying an additional NT$75.105 billion today, marking the fourth largest net purchase amount in history.

With a weakening US dollar, a strong Taiwan stock market, and an influx of hot money, all appreciation factors converged. The New Taiwan Dollar opened against the US Dollar at NT$31.57 today, and the exchange rate rose steadily, reaching a high of NT$31.456.

Foreign exchange traders stated directly that while foreign investors were operating two-way in previous days, today they no longer hesitated, with almost one-sided inflows. Exporters, seeing the exchange rate approach NT$31.4, dared not wait any longer and rushed to sell foreign currency, further pushing the exchange rate to a high point. The entire market sentiment is pushing the New Taiwan Dollar towards appreciation, and while the central bank is making adjustments, it will not go against the trend.

Foreign exchange traders analyzed that in addition to the generally weaker international US dollar, market rumors today indicated that the Bank of Japan aggressively intervened in the foreign exchange market, causing the Japanese Yen to briefly surge to the 155 mark, which also had some impact. Compared to previous years, the Bank of Japan's intervention in the foreign exchange market seems to be higher in magnitude and frequency. If this trend continues, it will bring appreciation pressure to other Asian currencies.

According to central bank statistics, the US Dollar Index depreciated by 0.4% today, and major Asian currencies all rose. The Renminbi appreciated by 0.26%, the New Taiwan Dollar by 0.37%, the Japanese Yen surged by 0.91%, and the Korean Won strongly rebounded by 1.37%.

The negative impact of the Middle East war has dulled. The New Taiwan Dollar exchange rate is closely following Taiwan stocks. Foreign exchange traders believe that the New Taiwan Dollar exchange rate had been stuck at around NT$31.5 for a while. If this wave of appreciation momentum continues, it is not ruled out that it will gradually approach NT$31.2. (Editor: Zhang Jun-mao) 1150506

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