Won-Dollar Exchange Rate Hits New High, Highest in 5 Months (Update)

Asian Currencies Such as Won, Yuan, and Yen Show Notable Weakness

The KOSPI opened at 2,752.26, down 4.83 points (0.18%) from the previous trading day (2,757.09), fluctuating throughout the day on the 27th. Employees are working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. Photo by Jo Yongjun jun21@

The won-dollar exchange rate hit a new high as it followed the weakness of major Asian currencies such as the yen and the yuan.

On the 27th, in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,348.7 won, up 9.2 won from the previous trading day. This is the highest level since November 1 last year, when it recorded 1,357.3 won at the closing price.

On that day, the won-dollar exchange rate opened at 1,343.8 won, up 4.3 won, and continued to rise due to the weakness of the yen and the yuan.

The yen-dollar exchange rate in the Tokyo foreign exchange market rose to 151.97 yen at one point that day, marking the highest level in about 34 years since July 1990.

The Bank of Japan, Japan's central bank, ended its negative interest rate policy by raising rates on the 19th, but the yen's value weakened instead. The market expects that further rate hikes by the Bank of Japan will be difficult, and forecasts that the yen's weakness will continue for the time being.

Local media analyzed that comments by Naoki Tamura, a policy board member of the Bank of Japan, on the same day also influenced the yen's weakness. He said, "We will proceed with the normalization of monetary policy slowly but steadily," and added, "The reins of future monetary policy are very important to properly conclude large-scale monetary easing."

The Chinese yuan also weakened that day after the People's Bank of China devalued the yuan exchange rate for the first time in three trading days. Recently, a coupling phenomenon between the yuan and the won has appeared, and the won is also evaluated to have been affected.