Taiwan's parliament passed a bigger tax break for families with children while stocks rallied — good news for households and investors, with defense spending and spy probes still in the background.

• A change to the income tax law raises the exemption for children to about NT$151,500, expected to help 2.37 million people.
• Stocks rose as foreign and local funds bought into a batch of shares ahead of quarter-end position squaring.
• Taiwan's higher defense budget is being read in Washington as a signal that Taipei is serious about paying for its own security.
• Prosecutors are widening an investigation into suspected military spying, and pump prices will stay flat next week.
• Taiwan also flew its first locally built sounding rocket, a small win for its space ambitions.

Outlook: The tax break puts more money in families' pockets, and buying interest in stocks is likely to hold into quarter-end.