Exchange Rate Hits 9-Month Low Ahead of BOJ Adjustment... Possibility of Breaking 1230 Won (Comprehensive)

[Image source=Yonhap News]

[Asia Economy Reporter Seo So-jung] The won-dollar exchange rate fell, marking its lowest level in nine months.

According to the Seoul foreign exchange market on the 16th, the won-dollar exchange rate closed at 1,235.3 won, down 6.0 won from the previous trading day's closing price. This is the lowest level since April 18 last year (1,234.4 won) based on the closing price.

The exchange rate opened at 1,238.0 won, down 3.3 won from the previous trading day's closing price, and continued to decline during the session, dropping as low as 1,231.7 won.

At the Bank of Japan (BOJ) monetary policy meeting scheduled for the 17th-18th, it is expected that the decision on whether to implement additional measures related to yield curve control (YCC) distortions, while reviewing the side effects of large-scale monetary easing, will determine whether the yen will strengthen further.

Additionally, two factors?the slowdown in U.S. inflation and the reopening of the Chinese economy?are continuously influencing the market, sustaining the global dollar weakness trend.

Baek Seok-hyun, an economist at Shinhan Bank, said, "The strengthening trend of major Asian currencies such as the yen and yuan is driving the decline in the exchange rate," adding, "The net buying by foreigners is also a factor in the exchange rate decline." He continued, "The exchange rate is falling amid caution toward the BOJ. If the BOJ introduces more radical policies, the downward pressure on the exchange rate could increase, and depending on the BOJ's outcome, the exchange rate may fall below the 1,230 won level."