The South Korean won is showing a trend of moving in tandem with the Japanese yen, which has fallen to its lowest level in 40 years, pushing the won-dollar exchange rate close to the 1,560 won mark during intraday trading.

In the Seoul foreign exchange market today (July 1), the won-dollar exchange rate closed the daytime session at 1,554.9 won, up 5.5 won from the previous close as of 3:30 p.m.

The rate, which finished the previous day at 1,549.4 won—the highest level since March 6, 2009 (1,550 won)—set a new record again today.

This daytime closing price is the highest since March 5, 2009 (1,568 won), during the global financial crisis.

The exchange rate opened at 1,549.8 won, up 0.4 won, and after a slight dip immediately following the opening, it reversed course and climbed into the 1,550 won range.

It showed a steep upward trend throughout the morning, reaching 1,559.2 won at 10:18 a.m., threatening to break the 1,560 won level.

Afterward, the rate pared some of its gains due to dollar selling by exporters anticipating a peak and caution regarding potential intervention by authorities, briefly falling below 1,550 won in the afternoon before increasing its gains again toward the close of the daytime session.

The surge in the exchange rate is attributed to the strength of the U.S. dollar, driven by expectations of interest rate hikes, combined with the yen falling to a 40-year low.

In global financial markets, the won typically moves in correlation with the yen.

The yen-dollar exchange rate surpassed 162 yen, reaching its highest level since December 1986 (158–163 yen), shortly after the Plaza Accord, and climbed to as high as 162.666 yen during intraday trading in the New York foreign exchange market overnight.

Today, it went a step further, reaching 162.837 yen around 12:36 p.m., nearing the 163 yen mark.

As of 3:30 p.m., it stood at 162.701 yen, up 0.463 yen.

Even after the psychological resistance level was broken and Japanese foreign exchange authorities issued verbal interventions, the upward trend of the yen-dollar exchange rate has not subsided.

The dollar index, which measures the value of the dollar against six major currencies, stands at 101.325.

Although it fell 0.002 from the same time the previous day, it remains at a high level in the 101 range.

There were observations that the steep rise in the exchange rate might stabilize once foreign investors finished rebalancing their domestic stock portfolios ahead of the end of the half-year, but net selling continues.

In the domestic KOSPI market, foreigners net sold 1.7 trillion won today, marking their ninth consecutive session of net selling.

Previously, on June 29, foreigners net sold a record 7.7 trillion won, and some analysts suggest that the resulting demand for repatriation of funds has actually fueled the rise in the exchange rate.

The won-yen cross rate stood at 955.63 won, up 0.68 won from the closing price at 3:30 p.m. the previous day.

(Photo: Yonhap News)