TWD: Central Bank's Willow Tree Theory Takes Effect, Rebounds from Depreciation to Close at 32.248

The Taiwan Stock Exchange Capitalization Weighted Stock Index entered a fierce tug-of-war between bulls and bears today (20), holding above the 42,000-point threshold despite strong downward pressure, and closed down 221.57 points. Meanwhile, the Taipei foreign exchange market remained under pressure, with the New Taiwan Dollar (TWD) once again depreciating past the 32.40 level. However, it reversed course in the final hour of trading, closing at 32.248, up 4 cents. The trading volume at Taipei Forex Brokers reached $2.471 billion, remaining in the historically high range.

In response to strong foreign capital outflows, Taiwan's central bank Governor Yang Jinlong recently stated that the central bank continues to follow the 'Willow Tree Theory,' making appropriate adjustments when necessary to prevent excessive market volatility.

The TWD opened at 32.28, up 0.8 cents, but depreciation pressure intensified during the session, pushing it as low as 32.436, a decline of 1.48 cents, testing the psychological 32.50 level. The intraday high-low spread reached 1.88 cents.

Among major Asian currencies, the Korean won surged nearly 0.4%, the Chinese yuan appreciated by 0.15%, the TWD closed up 0.12%, and the Singapore dollar rose about 0.1%. The U.S. Dollar Index slightly retreated by 0.03%, the Japanese yen traded flat in a narrow range, while the Thai baht edged down by 0.1%.

Cathay Futures Research Department analyzed that after a sharp decline in the Taiwan stock cash market, short-covering and technical rebound demand emerged. However, foreign selling pressure, margin call liquidations, and semiconductor valuation corrections have not been fully digested. In the short term, the key will be whether the 42,000-point level can form effective support for the Taiwan stock index, while resistance lies at 43,500 points and the quarterly moving average line.