Taiwan Keeps 80% of Its Foreign Exchange Reserves in U.S. Bonds, Central Bank Chief Says

Taiwan's central bank governor stated that the island keeps roughly 80% of its foreign exchange reserves invested in U.S. Treasury and other U.S. dollar bonds. The disclosure highlights the transmission channel between Taiwan's reserve management and U.S. sovereign debt demand, since large official holdings can compress Treasury yields and affect the dollar's relative attractiveness to Asian central banks. For Taiwan, the exposure cuts both ways: its reserve valuation moves with U.S. yields and the greenback, while the Taiwan dollar faces pressure when dollar strength or rising U.S. rates pull capital outward. Traders in U.S. Treasuries and the Taiwan dollar (TWD) are most directly sensitive to any shift in reserve allocation or reserve-manager signaling. The next catalyst to watch is Taiwan's central bank monthly foreign exchange reserves release, alongside the U.S. Treasury's upcoming TIC capital flows data, which will show whether official Taiwanese demand for Treasuries is changing.

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