S.Korea won up on economy hopes; importers weigh

* Won hits one-week high as econ hopes bolster stocks

* Seen staying firm on risk appetite

* Intervention caution to cap gains
(Updates to domestic close)

By Cheon Jong-woo

SEOUL, May 19 (Reuters) - The South Korean won rose to its
strongest in almost a week against the dollar on Tuesday as local
shares jumped on rekindled hopes for a global economic recovery.

The won KRW=, however, cut some of its earlier gains as
importers chased dollars for settlement on dips, on caution over
possible dollar-buying intervention by the foreign exchange
authorities.

Analysts said the local currency was projected to remain firm
as expectations for an economic upturn were likely to keep
investors looking at riskier assets, although wariness over
potential intervention may slow the won's rise.

"The impetus for the won will be bullish as real (trade- and
equity-related) flows will provide good support for now. However,
intervention fears will deter excessive moves, resulting in some
choppy price action," said Daniel Soh, a currency strategist at
FORECAST Pte Ltd.

The South Korean unit was quoted at 1,248.9/9.6 per dollar as
of 0600 GMT, compared with Monday's domestic close KRW=KFTC of
1,259.5.

The won strengthened to as firm as 1,234.5, the strongest
since May 13 before importers collected dollars for settlements,
with concern over potential measures by the authorities to stem
the won's further gains.

A firmer won usually hurts the overseas competitiveness of
the country's exports, which have been helping Asia's
fourth-largest economy weather the global economic downturn.

"Market players became cautious over the government moves
again and that will prevent the won from strengthening past the
1,200 level easily, despite many bullish factors," said Jeong
My-young, a strategist at Samsung Futures Inc.

Seoul shares .KS11 ended up 2.99 percent as foreign
investors bought a net 440.6 billion won worth of stocks on the
country's main exchange.

Earlier, a regulator said longer-term foreign currency
borrowing by major local bnaks so far this year had more than
doubled from the second half of 2008. [ID:nSEW000096]

0600 GMT 0310 GMT prev close
Won KRW= 1,248.9/9.6 1,246.5/7.1 1,259.5
Yen/won JPYKRW=R 12.9500/13 12.9275/40 13.2513/97
KOSPI .KS11 1,428.21 1,419.83 1,386.68
(Editing by Chris Lewis)