(March 24): Taiwan missed its bond-issuance target for the first time since September 2022 as investors demanded higher yields at an auction Monday due to concern over the policies of Donald Trump’s administration.

The island sold NT$21.45 billion (RM2.87 billion) of 20-year bonds, versus its original plan to issue NT$25 billion, according to the central bank, which is commissioned by the finance ministry to auction the securities.

Uncertainties in global trade due to Trump’s tariff threats have made the market more cautious about capital allocation for long-term bonds, said Ma Hsiao-hui, deputy head of the treasury department at the Ministry of Finance. “The market is more cautious than we expected,” Ma said.

The yield at Monday’s 20-year bond auction was set at 1.761%, the highest for the maturity since 2022, and exceeding the estimate of 1.73% in a Bloomberg survey. The result pushed up yields in the secondary market, with the 10-year yield jumping four basis points to 1.64% and its five-year peer climbing five basis points to 1.55%.

Taiwan’s central bank kept its benchmark interest rate at the highest level since 2008 last week as policymakers assessed Trump’s threat to slap a 25% tariff on semiconductors. A Bloomberg survey found that the median prediction is for a cut in the third quarter of next year, while an earlier survey forecast a bigger reduction in the first quarter of 2026.

“Trump’s impact on the global economy and inflation has made the market uncertain about the rate outlook,” said Aaron Shie, a fixed-income trader at Concord Securities Corp. Trump’s policies pose a risk to the economy and could push up inflation, which contributed to the high yield in today’s auction, he said.

Uploaded by Arion Yeow