Feb. 28 (Bloomberg) -- South Korea’s won rose to a one-week high as local manufacturers’ confidence improved and Federal Reserve Chairman Ben S. Bernanke said the bank’s stimulus policies were working, encouraging risk-taking. Bonds were steady.
The Kospi index rose 1.1 percent after Bernanke said the Fed’s bond-buying is having “meaningful and beneficial effects.” Italian government bonds advanced after demand increased at a debt sale following inconclusive election results. South Korean manufacturers’ confidence for March climbed to 76 from 72 for February, the Bank of Korea said in a statement today. That was the highest level since July.
“Investor concerns eased somewhat, pushing stocks and the currency up, after Bernanke’s comments and the Italian bond sale,” said Jeon Seung Ji, an analyst at Samsung Futures Inc. in Seoul. “Exporters’ dollar sales are also supporting the won, while further gains in the won will be limited due to still-lingering concerns that political uncertainty in Italy may prompt a worsening of the European debt crisis.”
The won climbed 0.2 percent to close at 1,082.90 against the dollar in Seoul, according to data compiled by Bloomberg. The currency touched 1080.85, the strongest level since Feb. 20, and has gained 0.5 percent this month. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, dropped 25 basis points to 7.02 percent.
South Korean industrial production rose 7.3 percent in January from a year earlier, official data showed today. Output unexpectedly fell 1.5 percent from the previous month as production of semiconductors and electronic components dropped off, indicating some companies may be scaling back due to the won’s recent rally.
The yield on South Korea’s 2.75 percent government bonds due December 2015 was unchanged at 2.63 percent, Korea Exchange Inc. prices show. The yield has fallen 14 basis points this month.
To contact the reporter on this story: Seyoon Kim in Seoul at email@example.com
To contact the editor responsible for this story: James Regan at firstname.lastname@example.org