Korean Won Gains, Stocks Pare Losses as North Names Kim Marshal
South Korea’s won extended gains following a report that the North gave the official title of marshal to leader Kim Jong Un. Stocks pared losses.
The decision was made yesterday by the government and the military, the state-run Korean Central News Agency said today in a statement. The won climbed for a fourth day after Federal Reserve Chairman Ben S. Bernanke said yesterday that possible stimulus measures could include further asset purchases, which previously have spurred fund flows into emerging markets. The won dropped 0.2 percent and the Kospi Index (KOSPI) 1.1 percent earlier as investors awaited the North’s announcement.
“The market is now reflecting its original momentum, based on Bernanke’s comments, as the North’s announcement turned out to be nothing significant” for financial investors, said Yun Se Min, a Seoul-based currency trader for Busan Bank.
The won appreciated 0.5 percent to 1,138.21 per dollar as of 12:33 p.m. in Seoul, according to data compiled by Bloomberg. It touched 1,137.80, the strongest level since July 6. The currency’s one-month implied volatility, a measure of exchange- rate swings used to price options, slid 13 basis points, or 0.13 percentage point, to 7.48 percent.
The Kospi index traded 0.6 percent lower at 1,811.14. South Korean defense stocks, which jumped ahead of the announcement, reversed gains. Huneed Technologies (005870), a military communications equipment maker, fell 2.3 percent, after rising as much as 10 percent earlier, while Speco Co. (013810) dropped 0.7 percent.
The yield on the government’s 3.25 percent bonds due June 2015 slid one basis point to 2.90 percent, Korea Exchange Inc. prices show. That’s the lowest for a benchmark three year note since December 2010. Three-year debt futures advanced 0.10 to 105.94 and the one-year interest-rate swap slid three basis points to 2.91 percent.
To contact the reporter on this story: Jiyeun Lee in Seoul at jlee1029@bloomberg.net Saeromi Shin in Seoul at sshin15@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net Darren Boey at dboey@bloomberg.net
Korean Won Trims Gains as North to Make ‘Important Announcement’
SeongJoon Cho/Bloomberg
The won appreciated 0.2 percent to 1,141.20 per dollar as of 11:23 a.m. in Seoul, after climbing as much as 0.5 percent earlier, according to data compiled by Bloomberg.
The won appreciated 0.2 percent to 1,141.20 per dollar as of 11:23 a.m. in Seoul, after climbing as much as 0.5 percent earlier, according to data compiled by Bloomberg. Photographer: SeongJoon Cho/Bloomberg
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