Asian currencies completed their biggest monthly drop since November last year, led by the South Korean won, on signs that the US Federal Reserve is moving closer to raising interest rates.
US Fed Chair Janet Yellen on May 22 said that she expects to increase benchmark borrowing costs this year if the US economy meets her forecasts. In northeast Asia, the Japanese yen’s slide to a 12-year low is eroding the export competitiveness of Taiwan and South Korea and risks exacerbating a currency war.
The weakness in Asian currencies “has been more of a function of dollar strength,” Royal Bank of Canada Hong Kong-based senior currency strategist Sue Trinh said. “The dollar strength will continue to weigh on Asian currencies as the Fed prepares to raise interest rates.”
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, fell 0.9 percent this month as of 5:12pm yesterday in Hong Kong. The won weakened 3.2 percent, the biggest drop in six months; Malaysia’s ringgit declined 2.8 percent; and Thailand’s baht depreciated 2 percent, data compiled by Bloomberg showed.
The yen has tumbled 18 percent against the greenback in the past 12 months as Japan pressed ahead with record monetary stimulus, while the won lost 7.9 percent and the New Taiwan dollar fell 2.2 percent. The Korea International Trade Association called for policymakers in Seoul to steady the exchange rate on Thursday, as Taiwan’s central bank stepped up intervention to weaken its currency.
The NT dollar and the won “are lagging the yen’s move, and over the longer term they will catch up,” Standard Chartered PLC Hong Kong-based foreign exchange strategist Eddie Cheung said. “Northeast Asian exports have been weak, so that should argue that there’s probably a bit more room for downside for these two currencies.”
The ringgit fell this month as the price of Brent crude oil dropped 5.4 percent following a 21 percent jump last month. Cheaper oil weighs on government finances in Malaysia, a net exporter of the commodity.
Elsewhere in Asia, Indonesia’s rupiah declined 2 percent this month against the greenback, India’s rupee lost 0.6, the NT dollar retreated 0.4 percent and the Philippine peso slipped 0.1 percent. China’s yuan was little changed.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last