South Korea’s won completed its biggest monthly gain since October 2011 as economic stimulus in China spurred demand for regional equities.
Global funds pumped $4 billion into Korean shares this month, the most since July, as monetary policy eased in the nation’s No. 1 export market. South Korea’s benchmark stock index had its best month since September 2012, while Shanghai’s jumped 19 percent. A gauge of dollar strength retreated for the first time since June as U.S. data pared speculation the Federal Reserve will raise interest rates soon.
“There’s been some equity inflows as a result of the rebound in Chinese equity markets,” said Sim Moh Siong, a foreign-exchange strategist at Bank of Singapore Ltd. The won’s strength is also due to “a more dovish Fed in response to the weakening U.S. data in the first quarter,” he said.
The won climbed 3.5 percent in April to close at 1,072.29 a dollar in Seoul, data compiled by Bloomberg show. The currency slipped 0.4 percent on Thursday. The Kospi advanced 4.2 percent since March 31.
Government bonds fell this month, with the yield on notes due September 2024 climbing 24 basis points, or 0.24 percentage point, to 2.41 percent, Korea Exchange prices show. The three-year yield rose 12 basis points to 1.84 percent.