Hyundai Motor Co. led South Korea’s auto stocks lower in Seoul trading after the yen fell to its weakest level since April 2011 versus the dollar, aiding Japanese carmakers’ exports.
Hyundai Motor dropped 2 percent to 225,000 won on the Korea Exchange, the lowest level since Nov. 28. Affiliate Kia Motors Corp. slumped 3.6 percent to 59,200 won, while the benchmark Kospi index dropped 0.6 percent.
The yen tumbled after Shinzo Abe, who has called for “unlimited” monetary easing by the Bank of Japan to end deflation and an increase in public-works spending, won the country’s general election yesterday. Japanese automakers compete with South Korean companies in key global markets including the U.S. A weaker currency boosts the value of exporters’ overseas sales when converted back to local currency.
“It’s the currency -- the won strengthening while the Japanese yen weakens,” Lee Sang Hyun, an analyst at NH Investment & Securities Co., said by telephone today. “There are concerns in the market that currency movements may have a negative impact on South Korean automakers.”
The won gained to 12.76 per yen in Seoul, after earlier reaching the strongest level in 20 months. South Korea’s central bank Governor Kim Choong Soo said last week that “appropriate” action on won volatility will be taken if needed.
Hyundai Mobis Co., South Korea’s biggest auto-parts maker, sank 3 percent to 291,500 won. Mando Corp., which also manufactures automotive parts, retreated 4.1 percent to 128,500 won.