Taiwan dollar advances 0.3% after closing at the strongest level in more than two years Monday
TWSE climbs 0.6%; inflows into stocks exceed $3.8 billion for 2017, the third-biggest in Asia, according to data as of Monday
Stocks including Wistron gain on Apple-related optimism, with Fubon Securities raising rating on the stock
Ten-year bond yield rises 2bps to 1.14%
The Taiwan Dollar has appreciated by more than 10% against the US dollar over the last 12 months and extended that advance today. It is overbought in the short-term but its recent strength has broken the Dollar’s five-year progression of higher reaction lows suggesting a medium-term change to the relationship between supply and demand.
The TAIEX Index has been ranging below the psychological 10,000 level since 1990. With Wall Street pulling back and an overbought condition on the currency there is scope for some consolidation, but a sustained move below 9250 would be required to question medium-term scope for a successful upward break.
The iShares MSCI Taiwan ETF (EWT) shares the TAIEX’s short-term overbought condition