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Seoul: Won down as markets wary before BOJ, Fed, stocks steady
[SEOUL] The South Korean won hit the skids on Tuesday as investors braced for policy meetings of the Bank of Japan and the US Federal Reserve.
"Expectations that the Fed will hold rates remain dominant, but it is highly likely that the dollar will strengthen after the decision is made since the Fed's views on the US economy have been quite optimistic recently," said Kim Moon-il, an FX analyst at Eugene Futures.
The Fed policy decision is due on Wednesday, which will follow the BOJ's verdict later on Tuesday.
Mr Kim said geopolitical tensions are also keeping the won down after North Korean leader Kim Jong Un warned of a nuclear warhead test on Tuesday through its major news agency KCNA.
The local currency stood at 1,191.7 to the dollar, down 0.5 per cent compared to the previous close at 1,186.1 on Monday.
South Korean shares were almost flat in thin early trade as investors kept to the sidelines ahead of the outcomes of the central bank meetings.
The Korea Composite Stock Price Index (KOSPI) was little changed at 1,972.77 points as of 0154 GMT.
Offshore investors bought a net 3.0 billion Korean won (S$3.47 million) worth of KOSPI shares, and have been buyers for four consecutive days.
Automakers were down on Tuesday, with Kia Motors Corp losing 2.8 per cent and Hyundai Motor Co down 1.4 per cent.
LG Electronics Inc fell 2.9 per cent.
Decliners outnumbered advancers 503 to 284.
March futures on three-year treasury bonds shed 0.05 per cent to 109.96.