Asian Stocks Cool, Capital Outflows Lead to NT Dollar's Sharp Depreciation to 32.143

(CNA) - Amidst a sharp downturn in Asian stock markets and continued capital outflows, Taiwan experienced a dual shock in its stock and currency markets. The Taiwan Stock Exchange (TWSE) plummeted by 1077 points today, while the New Taiwan Dollar (NTD) depreciated significantly against the US Dollar, closing at 32.143, a drop of 1.18 cents, reaching a new low in over a year and two months. The total trading volume in the Taipei and Yuanta foreign exchange markets was US$2.9485 billion.

Despite a rise in US stocks, Asian markets faced pressure due to the AI bubble, with Japanese and Korean stocks experiencing heavy losses. Taiwan's stock market showed volatility, with a sharp decline in the afternoon. High-priced stocks in the thousand-dollar range turned red, and several passive component stocks hit their lower limit, with only the financial and biotechnology sectors showing resilience. The index ultimately fell by 1077.28 points, closing at 45479.11 points, marking the 8th largest single-day point drop in history, falling below the 10-day moving average of 45057 points and the monthly moving average of 45710 points.

The NTD opened at 32.03 against the US Dollar today and continued its depreciation. However, with the sharp dive in the Taiwan stock market and increased foreign investor outflows in the afternoon, the NTD's decline widened. It touched an intraday low of 32.176, a depreciation of 1.51 cents, and closed at 32.143. This marks the fifth consecutive day of depreciation and the lowest closing price since April 30th of last year.

Foreign exchange traders stated that foreign investors continued to net sell over NT$50 billion in Taiwan stocks today. The Taiwan stock market remains in a correction phase in the short term. Coupled with the peak season for dividend payouts, as long as foreign investors continue to remit funds abroad, the NTD will still face depreciation pressure. On the other hand, the weakening NTD may also lead exporters to hold back on selling US dollars, further weakening the currency's support.

According to foreign media reports, the central bank has contacted some exporters recently, indicating that it can "sell foreign exchange without limit," which the market interprets as the central bank's desire to encourage exporters to appropriately sell foreign exchange to prevent foreign investor dividend remittances from exacerbating the depreciation. Forex traders noted that the NTD was still in the 31-yuan range last week and has now broken through the 32-yuan mark this week, with a considerable depreciation. This inevitably leads exporters to lean towards observation, waiting for a more favorable price.

According to central bank statistics, the US Dollar Index fell by 0.07% today. Asian currencies showed mixed performance: the Korean Won surged by 0.59%, the Japanese Yen appreciated by 0.12%, the Chinese Yuan slightly declined by 0.06%, while the NTD depreciated sharply by 0.37%, becoming the weakest Asian currency. (Editor: Huang Kuo-lun) 1150707

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