South Korea’s Won Sees Weekly Decline as Nation’s Shares Slideby
Equities retreat despite 10th day of net foreign buying
Hopes of global stimulus to limit losses in the won: Dongbu
South Korea’s won declined this week as local stocks retreated and cooling prospects for further central bank stimulus in Japan weighed on emerging-market currencies amid a stronger U.S. dollar.
A gauge of the greenback headed for a third week of gains after a slew of reports suggested the world’s biggest economy is improving, renewing speculation the Federal Reserve will raise interest rates by the end of the year. Bank of Japan Governor Haruhiko Kuroda damped hopes for so-called helicopter money, saying in a BBC Radio 4 interview recorded on June 17 that was aired Thursday that there is "no need and no possibility” for it at this stage. Global funds purchased shares for a tenth day, the longest buying streak since April.
The won gained 0.2 percent to 1,134.45 per dollar as of the 3 p.m. close in Seoul Friday, trimming its loss since July 15 to 0.1 percent. The Kospi index of shares dropped 0.3 percent over five days after rallying 2.8 percent last week. A measure of developing-nation exchange rates declined 0.1 percent Friday.
“Reported comments by Kuroda have disappointed markets,” said Yuna Park, an analyst at Dongbu Securities Co. in Seoul. However, “hopes over stimulus measures by global central banks still hold firm,” and this will prevent the won from weakening too far beyond 1,130 per dollar, she said.
South Korea’s 10-year bonds fell for a second week, with the yield rising two basis points from July 15 to 1.42 percent, according to exchange prices. The three-year yield was little changed at 1.23 percent.