The South Korean won fell against the dollar early on Friday, pressured by worries about geopolitical tensions after North Korea threatened a nuclear war. The won, however, found some support as exporters are expected to buy it on dips if it gets close to 1,160 per dollar and amid a lack of interest in thin pre-holiday trade. The local currency was quoted at 1,154.0/4.4 per dollar as, compared with Thursday's domestic close of 1,148.8.
"The North's latest threat pushed the won down, but I don't expect it to escape from a range between 1,150 and 1,160," said a US bank dealer in Seoul. On Thursday, Pyongyang threatened a nuclear "holy war" and Seoul vowed a "merciless counter attack" if the South was attacked again as both sides raised the rhetoric on a day of more military exercises in the South.
Foreign investors sold a net 2.3 billion won ($2 million) worth of stocks on the main exchange after buying a combined net 492.1 billion won in the previous two consecutive sessions. The benchmark KOSPI fell 0.14 percent. Treasury bond futures barely moved as local market players are keeping an eye on foreign investors and in subdued trading.
Three-year treasury futures for the March contract were down 0.02 point at 103.83. Foreigners purchased a net 110.5 billion won in treasury bond futures after scooping up 1.94 trillion won during the prior three sessions in a row. "The key will be whether foreigners keep buying bond futures. Domestic players have little interest and are just looking at foreign investors," said a broker at a local futures firm.