Won Falls Against Dollar After Four Days as Settlement Demand Supports Floor

The Korean won closed lower against the U.S. dollar for the first time in four trading days, though the downside was supported by settlement demand and bargain-hunting purchases.

The won-dollar exchange rate closed at 1,460.3 won in Seoul's foreign exchange market on the 9th, down 9.2 won from the previous trading day.

This marks the first decline in the weekly closing rate in four trading days. However, the rate remained above 1,460 won for the third consecutive day.

The currency opened at 1,465.50 won, down 4.0 won from the previous close. As market sentiment shifted to "risk-on," the KOSPI briefly surged more than 4%. Combined with yen strength, the won fell to an intraday low of 1,459.3 won, but settlement demand and bargain-hunting inflows supported the floor, pushing it back up to 1,468.3 won.

"The rate fell in the morning due to export companies' negotiation volumes, but the won-dollar rate rose again as the yen turned weaker during the session," a foreign exchange market official said.

In Japan, the yen weakened after the ruling Liberal Democratic Party, led by Prime Minister Takaichi who campaigned on tax cuts and aggressive fiscal spending, won a landslide victory in the general election. However, Japanese authorities attempted to contain market movements through verbal intervention. Chief Cabinet Secretary Minoru Kihara said, "We are concerned about one-sided and rapid movements," while Vice Finance Minister Atsushi Mimura stated, "We are watching the market with vigilance."

The Dollar Index (DXY), which measures the dollar's value against six major currencies, fell 0.36% to 97.414 from the previous trading day.

The KOSPI closed at 5,298.04, up 208.90 points (4.10%) from the previous session. Foreign investors net purchased approximately 448.5 billion won in the securities market.

The yen-dollar exchange rate stood at 156.386 yen, down 0.3%.

As of 3:30 p.m., the won-yen cross rate was 933.76 won per 100 yen, down 3.03 won from the same time the previous trading day.

Meanwhile, Asian markets rose across the board, driven by reduced political uncertainty following the LDP's landslide election victory in Japan and a rebound in U.S. technology stocks.

According to MarketWatch, Japan's benchmark Nikkei 225 index closed at 56,363.94 yen, up 2,110.26 yen (3.89%) from the previous trading day. The TOPIX also closed higher at 3,783.57, gaining 84.57 points (2.29%).