Taiwan Dollar Soars by Seven Cents; Central Bank Clarifies: No U.S. Pressure Behind NT Dollar Appreciation

Taiwan Dollar Appreciates Significantly Against the US Dollar

The Taiwan dollar has recently appreciated significantly against the US dollar, falling from 33.2 at the beginning of April to 31.2 today, a 5% increase over the course of a month. Today alone, it appreciated by seven cents. The Central Bank of Taiwan has issued a rare press release stating that recent media reports claiming the United States requested the appreciation of the New Taiwan Dollar and mentioned specific exchange rates are inconsistent with the facts.

The Taiwan Dollar Surpassing 32: Central Bank Clarifies that US Request for Appreciation is Not Accurate

The Central Bank of Taiwan issued the following clarifications regarding the appreciation of the New Taiwan Dollar:

1. Since April 9, the United States has engaged in trade negotiations with Japan and South Korea, with some media mentioning the Mar-a-Lago Accord and speculating that the United States might request currency appreciation from its major trading partners during tariff negotiations.
2. It has been reported that US Treasury Secretary Scott Bessent recently discussed exchange rate issues with Japanese Finance Minister Katsunobu Kato. Secretary Bessent stated that the US-Japan trade talks would not mention specific exchange rate targets, but expressed hope that Japan would respect G7 agreements and refrain from competitive devaluation of its currency to gain unfair trade advantages. Subsequently, Japanese officials emphasized that the US did not discuss specific target levels for exchange rates, and both parties confirmed that exchange rates should be determined by the market, as excessive fluctuations could harm the economy.
3. Since 2021, the US Treasury’s currency policy reports have indicated that no major trading partner has engaged in competitive devaluation to gain unfair competitive advantages, and thus no country has been designated as a currency manipulator.
4. The US Treasury has not requested the appreciation of the New Taiwan Dollar. Domestic media reports suggesting that the US requested the appreciation of the New Taiwan Dollar are inconsistent with the facts. Our communication channels with the US Treasury are smooth, and both sides will continue to exchange views on macroeconomic and exchange rate policy issues based on good interaction moving forward.
5. For a long time, the exchange rate of the New Taiwan Dollar against the US Dollar has performed relatively steadily compared to other major currencies. Our bank will continue to strive to maintain the dynamic stability of the New Taiwan Dollar and closely monitor dynamics in the international financial market.

US Dollar Briefly Falls Below 140 Yen, Then Rebounds to Above 145

On April 26, US Treasury Secretary Scott Bessent stated that he had very constructive talks with Japanese Finance Minister Katsunobu Kato and acknowledged that discussions regarding exchange rates took place.

Very constructive talks with Minister of Finance Katsunobu Kato of Japan. I was pleased to follow up on previous reciprocal trade discussions between the United States and Japan, as well as to discuss matters pertaining to exchange rates. Looking forward to our next…
pic.twitter.com/9B8Q5Ny7Ri
— Treasury Secretary Scott Bessent (@SecScottBessent) April 26, 2025

However, market reactions suggest that after briefly falling below 140 at the end of April, the USDJPY has recently gradually risen above 145.

The Bank of Japan maintained its policy settings unchanged on Thursday (May 1) and postponed the timeline for achieving its inflation target, citing trade wars as a risk factor. According to a Bloomberg survey, observers of the Bank of Japan expect that the timing for interest rate hikes will be delayed, with the likelihood of a rate hike in September dropping from 89% in the last survey to 45%.

Dollar Sell-off Triggers a ‘Killing Each Other’ Market? Central Bank Remains Optimistic?

However, Japan’s lack of pressure from the United States does not mean Taiwan is free from it. The trade war initiated by Trump has led investors to withdraw from US assets, causing a wave of selling off dollars that triggered a ‘killing each other’ market. The Taiwan Central Bank, which has traditionally intervened to prevent currency depreciation, has not taken action to prevent appreciation this time, reflecting a somewhat optimistic attitude, which may also be a primary reason for the significant appreciation of the Taiwan Dollar!

Today, the Taiwan Dollar rose by over seven cents before noon, a magnitude of 2.6%, which is rare in history. Forex traders have also indicated that there is no buying pressure for the dollar below, indicating that this wave of appreciation for the Taiwan Dollar may have no bottom in sight.

Risk Warning

Investing in cryptocurrencies carries a high level of risk, and prices can be highly volatile, potentially resulting in the loss of your entire principal. Please assess risks carefully.