by Moonyoung Tae | 6:09 PM PST | February 12, 2015
(Bloomberg) -- South Korea’s won rose the most since 2011, tracking gains in the yen after the Bank of Japan was said to view further monetary stimulus as counterproductive for now.
Additional measures to shore up inflation could trigger declines in the yen that damage confidence, and recent gains in exports and production support the case against expanding asset purchases, according to people familiar with the talks. The Japanese currency rose 0.5 percent following a 1.1 percent jump Thursday. The won and yen tend to move in tandem as South Korea and Japan compete for exports in global markets.
“The yen escaped from its narrow range and its highly possible the won will continue to follow the Japanese currency,” said Lee Dae Ho, a Seoul-based currency analyst at Hyundai Futures Corp. “Dollar selling by local exporters continues ahead of the Lunar New Year holidays, adding upward pressure on the won.”
The won climbed 1.3 percent, the most since December 2011, to 1,096.85 a dollar as of 1:45 p.m. in Seoul, according to data compiled by Bloomberg. That pared its weekly decline to 0.6 percent. South Korea’s financial markets will be closed from Feb. 18 to Feb. 20 for the Lunar New Year.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 peers, fell the most since 2013 on Thursday as a report showed U.S. retail sales dropped in January by twice as much as economists surveyed by Bloomberg had forecast. A Ukraine cease-fire deal also bolstered demand for emerging-market assets.
Government bonds rose, pushing the yield on the notes due December 2017 down two basis points, or 0.02 percentage point, to 2.06 percent, Korea Exchange prices show. The five-year yield fell two basis points to 2.16 percent, while that on 10-year securities dropped one basis point to 2.40 percent.
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