The won jumped the most in more than 18 months and government bonds rallied after Federal Reserve Chairman Ben S. Bernanke said the U.S. economy still requires stimulus, and South Korea kept interest rates steady.
The won led a 0.3 percent advance in the Bloomberg-JPMorgan Asian Dollar Index that tracks 10 currencies in the region as the greenback weakened after Bernanke backed sustained stimulus even as a record of policy makers’ June meeting showed them debating whether to halt bond buying by the Fed this year. The Bank of Korea held its benchmark rate at 2.50 percent at a monetary policy meeting today, a decision predicted by all 18 analysts in a Bloomberg survey.
“Bernanke’s comments assured the market that the Fed’s tapering may not happen earlier than investors expected, and that lifted the won,” said Jeon Seung Ji, an analyst at Samsung Futures Inc. in Seoul. “Exporters are performing relatively well, which is another reason behind the won’s recent rally.”
The won rose 1.2 percent to close at 1,122.39 per dollar in Seoul, the biggest gain since December 2011, according to data compiled by Bloomberg. It touched 1,122.07, the strongest level since June 10.
Minutes of the Federal Open Market Committee’s June 18-19 meeting showed many policy makers want to see more signs employment is picking up before slowing bond purchases that have fueled demand for emerging-market assets. Bernanke said on June 19 the central bank may phase out the stimulus measures this year if the economy grows in line with the Fed’s projections. U.S. jobless rate is at 7.6 percent and it hasn’t been below 7 percent since November 2008.
Hyundai Mipo Dockyard Co. won a $165 million order for container ships, the company said in a statement yesterday. Daewoo Shipbuilding & Marine Engineering also won a 481.2 billion won ($423 million) order for container ships, according to a regulatory filing on July 9.
The government will provide 3 trillion won of foreign-exchange insurance support to smaller exporters to this year as volatility in the currency market rise, the trade ministry said in a statement today.
The yield on the 2.75 percent government notes due March 2018 fell 13 basis points to 3.10 percent, the lowest level since June 19, prices from Korea Exchange Inc. show.