(Bloomberg) -- Taiwan’s benchmark bond yield fell the most in 18 years after the central bank delivered a smaller-than-expected rate hike on Thursday and US Treasury yields declined. 

The island’s 10-year bond yield dropped as much as 22 basis points, the most since 2004, to 1.17%. The central bank increased its policy rate by 12.5 basis points to 1.5%, less than the 25 basis-point increase forecast in a Bloomberg survey of economists.

“The smaller-than-expected rate hike, alongside the broad retreat of developed-market yields saw some unwinding of bearish bets on Taiwanese bonds,” said Christopher Wong, senior foreign-exchange strategist at Malayan Banking Bhd. in Singapore.

The Federal Reserve raised its key interest rate by 75 basis points on Wednesday, the biggest single increase since 1994.

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