June 25 (Bloomberg) -- The won rebounded from a one-year low on speculation South Korea intervened to stem a slide in the currency, which weakened in six of the last seven weeks. Government bonds rose, pushing the three-year yield down by the most since March.
President Park Geun Hye asked her ministers today to monitor financial markets while the Korea Exchange said it will work with government agencies to help stabilize markets. South Korea’s Kospi Index of stocks has plunged 5.7 percent and the won slumped 2.5 percent since Federal Reserve Chairman Ben S. Bernanke said last week that the monetary authority may start tapering its bond purchases this year. Foreign funds sold more South Korean shares than they bought for a 13th day while stocks fell in China, South Korea’s largest export market.
“The won recovered on speculation the authorities may have intervened in the market today as it weakened past 1,160,” said Son Eun Jeong, an analyst at Woori Futures Co. in Seoul. “Chinese stocks tumbled and Korean stocks followed on concerns China’s growth is slowing, which will have a spillover effect on Asian economies.”
The won advanced 0.1 percent to 1,159.65 per dollar in Seoul, snapping a three-day decline, according to data compiled by Bloomberg. It touched 1,162.90, the weakest level since June 15, 2012. One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, dropped 65 basis points, or 0.65 percentage point, to 12.62 percent.
The yield on the 2.75 percent government bonds due June 2016 fell 10 basis points to 3.01 percent, prices from Korea Exchange Inc. show. That’s the biggest decline for a three-year benchmark since March.
Overseas investors sold $4.74 billion more of South Korean shares than they bought this month through yesterday, exchange data show.
The MSCI Asia Pacific Index slid after the cost of locking in China’s interest rates fell for a third day as the central bank refrained from selling bills amid the worst cash crunch in at least a decade. Goldman Sachs Group Inc., China International Capital Corp. and DBS Bank Ltd. cut their 2013 growth forecasts for China’s economy in the past week.
South Korea’s presidential and prime ministerial websites shut down amid reports that North Korea hacked the sites on the 63rd anniversary of the outbreak of the Korean War, Yonhap News reported, without citing a source. South Korean presidential spokeswoman Lee Mi Yon declined to comment on whether the site was hacked.
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