The KRW-JPY exchange rate in the Seoul foreign exchange market fell to 898.90 won per 100 yen at 2:38 PM on the 23rd, down 6.13 won from the previous session, driven by sustained Korean won strength. This marks the first time the rate has dropped below the 900 won threshold since November 21, 2024, approximately 20 months ago. The decline reflects divergent currency movements, with the USD-KRW rate falling from a peak of 1,559.20 won on the 1st to the 1,460 won range on the 23rd, while the USD-JPY rate rose above 163 yen on the 21st for the first time in over 40 years.
KRW-JPY Rate Touches 898.41 Won Intraday
The KRW-JPY exchange rate slipped to 898.41 won around noon on the 23rd before stabilizing near the 900 won level. The rate has been trading sideways around this threshold following the intraday low. The last time the exchange rate traded below 900 won was November 21, 2024.
USD-KRW Rate Declines to 1,460s Amid Won Strength
The USD-KRW exchange rate peaked at 1,559.20 won on the 1st and has declined steadily since, entering the 1,460 won range on the 23rd. The won's appreciation is attributed to dollar-selling supply dominance, robust economic growth, current account surplus, and the Bank of Korea's shift toward monetary tightening.
USD-JPY Rate Holds Above 163 Yen
The USD-JPY exchange rate climbed above 163 yen on the 21st for the first time in over 40 years, remaining in the 163 yen range with limited downward movement. The yen's weakness reflects Japan's fiscal expansion stance and the Bank of Japan's gradual interest rate increases amid Middle East geopolitical uncertainties.
Hana Bank Researcher Assesses Currency Correlation Shift
Lee Yu-jeong, a researcher at Hana Bank, stated that "steep yen depreciation has been identified as a major risk factor for the Korean won" due to "similar export competition structures between the two countries and direct and indirect effects including dollar strength pressure from a weak yen." However, Lee noted that "recently, domestic supply factors are having a greater impact on the won exchange rate than external volatility," adding that "the spillover effects of yen weakness will be somewhat more limited than before."
The KRW-JPY rate exceeded 973 won on the 7th but has declined by over 70 won in approximately two weeks. The won and yen, which have historically shown synchronized movements, have moved in opposite directions during this period.
FAQ
What caused the KRW-JPY exchange rate to fall below 900 won on the 23rd?
The KRW-JPY exchange rate dropped below 900 won due to sustained Korean won strength, with the USD-KRW rate declining from a peak of 1,559.20 won on the 1st to the 1,460 won range on the 23rd. Contributing factors included dollar-selling supply dominance, robust economic growth, current account surplus, and the Bank of Korea's shift toward monetary tightening.
Why did the won and yen move in opposite directions recently?
The Korean won strengthened due to domestic supply factors and economic fundamentals, while the Japanese yen weakened as the USD-JPY rate rose above 163 yen on the 21st for the first time in over 40 years. The yen's decline reflects Japan's fiscal expansion stance and the Bank of Japan's gradual interest rate increases amid geopolitical uncertainties.
