Taipei: The National Financial Stabilization Fund will continue to intervene in the local stock market despite a significant rebound since it first entered the market in early April, with the Ministry of Finance (MOF) citing uncertainties stemming from U.S. tariff policies.

According to Focus Taiwan, the MOF stated that the stabilization fund will remain active in the market as tariff discussions between Taiwan and the U.S. are still ongoing, and Washington has not yet announced a tariff on semiconductors under Section 232 investigation of the U.S. Trade Expansion Act. The MOF also noted that high liquidity due to loose monetary policies from major central banks has resulted in increased inflationary pressure, with geopolitical unease impacting the global economy.

Following a regular quarterly meeting, the MOF reported that the stabilization fund’s executive committee decided the fund will continue its efforts to stabilize the stock market, a move aimed at boosting investor confidence and reducing pressure on the capital market. The NT$500 billion (US$16.39 billion) stabilization fund, established in 2000, serves as a buffer against unexpected external factors potentially disrupting the local bourse. The fund began its support on April 9, marking its ninth intervention since inception.

The Trump administration announced sweeping “reciprocal tariffs” on April 2, including a 32 percent tariff on Taiwan. Following the Tomb Sweeping Festival weekend, the local stock market reopened on April 7 with the Taiex, the weighted index on the Taiwan Stock Exchange, plunging 9.7 percent to 19,232.35. Further declines occurred on April 8 and April 9, with the Taiex falling 4.02 percent and 5.79 percent, respectively, reaching a low of 17,391.76 points.

During ongoing negotiations, Taiwan has managed to reduce its tariff from the initial 32 percent to 20 percent, with further talks aimed at lowering it below 20 percent. Taiwan is also working to mitigate the impact of a potential tariff on semiconductors, a critical component of the country’s exports.

Since the volatility in early April, the Taiex has rebounded significantly. From April 9 to September 30, the index rose 48.46 percent to 25,820.54, driven largely by excitement over artificial intelligence developments alongside the stabilization fund’s efforts. During the same 122 trading sessions, the MOF reported that the stabilization fund invested over NT$12.25 billion into the stock market, resulting in unrealized profits of NT$3.66 billion and cash dividends exceeding NT$40.93 million.

Meanwhile, U.S. markets faced heavy pressure on Friday, with the Dow Jones Industrial Average dropping 1.90 percent and the tech-heavy Nasdaq index declining 3.56 percent amid an escalating tariff conflict between the U.S. and China, following President Donald Trump’s threat to increase tariffs on Chinese goods to 100 percent.

Despite the stabilization fund’s continued presence, market analysts suggest that U.S. market volatility could impact the Taiex when local trading resumes on Monday after the October 10 holiday weekend, as American depositary receipts (ADRs) of Taiwan Semiconductor Manufacturing Co. fell 6.41 percent on Friday.