Seoul: Won slides to five-week low on weakening yen; shares lower
[SEOUL] The South Korean won was driven to a five-week low against the dollar on Thursday, as weakness in the yen raised the spectre of intervention by financial authorities to keep the won's strength in check against the Japanese currency.
The won was quoted at 1,106.2 to the dollar as of 0150 GMT, compared to 1,097.7 at Wednesday's close.
The yen/won cross rate was seen at 9.2129, maintaining a slender gap above 9.1, the widely perceived danger threshold.
The greenback has been bolstered in recent sessions by a stellar jobs report as well as hawkish comments from a top US Federal Reserve official, which have combined to reinforce expectations of a Fed rate hike in mid-2015.
"Although profit-taking and exporter demand could help pare some losses, the won is likely to stay above the 1,100 level with the yen falling past 120 to the dollar," said Hong Seok-chan, an FX strategist at Daishin Economic Research Institute.
South Korean shares fell on Thursday, tracking declines in their regional peers, as investors were unsettled by the lack of discernible progress in bailout talks between Greece and its debt-holders.
The Korea Composite Stock Price Index (KOSPI) was down 0.5 per cent at 1,936.87 points as of 0150 GMT.
Energy counters underperformed after oil prices fell as much as 3 per cent overnight, with SK Innovation sliding 2.3 per cent while S-Oil fell 1.9 per cent.
Korea Gas Corp plunged 4.6 percent after the state utility reported a 31.9 per cent decline in profits during the fourth quarter, well below street forecasts.
Offshore investors weighed on the index, having sold a net 58.2 billion won (US$52.6 million) worth of shares on the main bourse by mid-morning.
Defensive plays such as telecom stocks were one of few winners on the main board, with SK Telecom gaining 2.3 per cent while LG Uplus climbed 2.2 per cent.
The KOSPI 200 benchmark of core stocks fell 0.7 per cent while the junior, tech-heavy KOSDAQ shed 0.1 per cent.
March futures on three-year treasury bonds was trading 4 basis points lower at 108.42.
REUTERS
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