UPDATE 1-Taiwan asks insurers to adjust forex hedging as local currency strengthens

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TAIPEI, April 14 (Reuters) - Taiwan’s financial regulator has asked local insurers to adjust their foreign exchange hedging to reduce the impact of the strengthening local currency against the U.S. dollar on their earnings, according to a document from the regulator obtained by Reuters.

Taiwan’s insurers, which invest heavily in overseas markets, have been hit by the stronger Taiwan dollar, which has firmed about 6 percent so far this year and is among Asia’s best-performing currencies.

“The local currency has been a bit volatile,” the Financial Supervisory Commission (FSC) said in the document, which is dated April 12, advising that insurers should adjust their hedging to reduce the impact of foreign exchange volatility on their earnings and net value.

The FSC said earlier this month that companies listed on the local stock exchange had reported for exchange losses of T$133.9 billion ($4.4 billion) in 2016. About T$122 billion of the currency losses was reported by insurers.

Taiwan’s central bank, fearful of being labelled a currency manipulator by U.S. President Donald Trump, has pulled back on intervention to weaken the Taiwan dollar.

FSC officials could not be reached for comment.

Reporting by Emily Chan; Writing by Faith Hung; Editing by Sam Holmes