Taiwan Bonds Drop a 3rd Day, Currency Rises on Optimism for Global Growth

Taiwan’s government bonds dropped for a third day and the local dollar strengthened after reports that showed better-than-forecast growth in U.S. jobs, fueling optimism the global economy is recovering.

The Taiex (TWSE) index of shares rallied 0.9 percent after overseas investors bought $1.1 billion more Taiwanese stocks than they sold in the last five days, taking net purchases for the year to $2.1 billion, according to exchange data.

The 243,000 increase in American payrolls was the most since April and exceeded all forecasts.

The unemployment rate of the world’s biggest economy dropped to 8.3 percent, the lowest since February 2009.

Euro Falls on Concern Greek Talks Will Stall; Yen Approaches Postwar High

The euro weakened versus the yen and the dollar as Greece struggled to reach an agreement with bondholders on cutting the nation’s debt burden, stoking concern Europe’s crisis will deepen.

The common currency fell against 14 of its 16 major counterparts as Spanish bonds declined after the nation sold debt today.

The yen rose to within 1 percent of a postwar high against the dollar, prompting speculation Japan will intervene to limit the currency’s gains.

The euro briefly erased losses after China’s Premier Wen Jiabao said his nation supports European efforts to stabilize the 17-nation currency.

Italy Sells Maximum EU11 Billion of Bills

11 billion euros ($14.5 billion) of Treasury bills today, meeting its target, and borrowing costs plunged from the previous sale.
The Rome-based Treasury sold 8 billion euros of 182-day bills at 1.969 percent, the lowest since May and down from 3.251 percent at the last auction of similar-maturity securities on Dec. 28.

Investors bid for 1.35 times the amount offered, down from 1.69 times last month. The Treasury also sold 3 billion euros of 331-day bills at a rate of 2.214 percent.

“Bond auctions in Italy are no longer nerve-wracking affairs,” Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, said by e-mail.

U.S. Debt in Worst Start Since 2003

Treasuries are off to their worst start since 2003 on signs the U.S. economy is strengthening and Europe is moving closer to resolving its debt crisis.

Treasury 10-year notes fell for a third day as a U.S. report showed home sales rose for a third month in December, adding to signs including falling claims for jobless benefits that the world’s largest economy is gaining momentum.

Greek officials held debt-swap talks for a third day after Spain and France sold bonds at lower yields yesterday.