Asian Currencies: South Korea won ends down on weaker yen and security fears

10 Apr, 2004

The South Korean won ended lower on Friday, coming under pressure from a weaker yen and suspected government intervention.
Won sentiment was also chilled by news the government barred civilians from visiting Iraq after seven South Korean missionaries were kidnapped and then released amid worsening violence a year after the fall of Iraqi leader Saddam Hussein.
The won finished at 1,143.9 to the dollar after opening at 1,144.0 and compared with Thursday's close of 1,140.4, the strongest finish since November 16, 2000 when it ended at 1,138.3. It moved between 1,141.6 and 1,144.2.
"Authorities appeared to have placed won-weakening bids through state-run banks in the last minutes of trade," said a foreign bank dealer.
"It's another strong sign that the government will try to maintain the 1,140 level."
The won currency moved in a narrow three-won range against the greenback ahead of the weekend, as the market balanced a softer Japanese yen with equity-related dollar sales.
The yen fell back against the dollar, hit by news that militants had seized three Japanese civilians in Iraq and amid further evidence of a firming US job market.
The yen traded at 106.42 per dollar in late Asia trade versus 106.22 in New York trade on Thursday. However, sustained foreign buying of local shares and exporters' dollar offers limited further losses in the won, traders said.
Finance Minister Lee Hun-jai said on Friday the country was likely to enjoy brisk export growth at least until the end of the year but a clear-cut recovery in domestic consumption still appeared some months away.
The yen/won cross rate a calculated rate based on each currency's value against the dollar, was quoted at 10.7388/7478 versus 10.7901/41 late on Thursday.
On the non-deliverable forward market, one-month won stood at 1,146.9/7.9 against 1,143.0/4.0 late on Thursday, and three-month won was at 1,152.8/3.8 compared with 1,148.9/9.9.

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