South Korean Won Snaps Four-Day Advance on Intervention ConcernYewon Kang
The won dropped, snapping a four-day advance, on concern South Korean authorities will curb gains as the yen’s slide poses a threat to the nation’s exports.
South Korea will act if needed to stabilize the currency market to help businesses cope with the weak yen, the trade ministry said in an e-mailed statement today. The won’s 11 percent gain versus the Japanese currency in the past six months hurts the competitiveness of companies such as Samsung Electronics Co. and Hyundai Motor Co. in overseas markets.
The won weakened 0.2 percent to 1,059.15 per dollar in Seoul, data compiled by Bloomberg show. It strengthened 1.1 percent in the last four days. The yen fell 0.3 percent to 103.30 against the dollar today.
“Investors are cautiously monitoring the yen-won rate as it may be one of the reasons for the authorities to step in,” said Han Sung Min, a currency trader at Busan Bank in Seoul. “The won’s fall against the dollar will be limited because exporters may want to sell dollars as no big economic data are scheduled for release.”
One-month implied volatility in the won, a gauge of expected moves in the exchange rate used to price options, fell 27 basis points, or 0.27 percentage point, to 6.09 percent.
South Korea’s foreign-currency deposits fell for the first time in seven months in December to $48 billion, Bank of Korea said in a statement yesterday.
Government bonds remained steady. The yield on the 3 percent notes due December 2016 was at 2.89 percent, according to Korea Exchange prices.