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South Korea stocks reset record high; Philippine shares hit 3-year low
Philippine peso falls 0.4%, Taiwan dollar rises 0.4%
Analysts warn that proxy hedge demand linked to Taiwan dollar strength could continue to pressure the Korean won, especially if US Treasury comments or further rate cuts spur volatility in the dollar-won exchange rate.
The Korean won and Taiwan dollar, once closely linked as proxy hedge targets, are now decoupling as diverging stock market trends and foreign capital flows drive differing currency movements, with the Taiwan dollar outpacing the won in strength amid record trade surpluses and robust equity inflows.
Taiwanese life insurers are revising reserve rules and boosting hedging as the Taiwan dollar surges, with major firms conducting scenario-based stress tests to manage mounting FX losses.