28.07.202606:19:26UTC+00Taiwan 10Y Yield Jumps on Rate Hike Bets

Taiwan’s 10-year government bond yield rose to around 1.88% in late July, its highest level since October 2022, as investors increasingly priced in the likelihood of tighter monetary policy. Expectations of higher interest rates have strengthened after inflation remained above the central bank’s 2% target for several consecutive months, reinforcing the view that policymakers may need to maintain restrictive monetary conditions or even tighten further if price pressures persist. Still, the central bank has emphasized that future policy decisions will remain data-dependent.

The rise in bond yields has also been driven by the central bank’s liquidity withdrawals aimed at curbing depreciation of the Taiwan dollar, as well as robust investor demand for AI-related equities. The move has been part of a broader bond market selloff, with the 20-year yield climbing to its highest level since 2014 and the five-year yield reaching its highest level since 2008.