Nov 18, 2014 1:37 AM ET
South Korea’s won fell to within 0.4 percent of the weakest level in 14 months as the currency tracked an overnight loss in the yen.
Japanese Prime Minister Shinzo Abe’s additional monetary stimulus has caused the yen to tumble 3.7 percent against the dollar this month, the second-worst performance among the world’s 16 most-traded currencies. The won tends to closely follow the yen because the countries’ companies compete in similar export markets. Abe may delay the implementation of a sales-tax increase after data yesterday showed the economy slipped into recession.
“I don’t think that the delay in the sales tax is enough to change the underlying view about the Bank of Japan policy being yen-negative,” said Tim Condon, head of Asia research at ING Groep NV in Singapore. “Whenever the dollar-yen hits a new high, the won is going at least in the same direction” as Japan’s currency, he said.
The won dropped 0.5 percent to 1,099.28 per dollar in Seoul, according to prices compiled by Bloomberg. The currency fell to 1,104.20 yesterday, the weakest level since September 2013. The yen was little changed versus the greenback at 116.63 after falling 0.3 percent yesterday. The won declined 0.5 percent against the yen to 9.42.
The yield on the South Korean government’s 2.75 percent bonds due June 2017 was little changed at 2.19 percent, prices compiled by Bloomberg show. The 10-year yield dropped one basis point to 2.78 percent.
original source: http://www.bloomberg.com/news/2014-11-18/south-korea-s-won-declines-toward-14-month-low-on-yen-weakness.html