South Korea won unfazed by North Korea missile, rockets to fresh 15-month high
SEOUL (Reuters) - The South Korean won rose for a fourth straight trading session and posted yet another fresh 15-month high on Wednesday as investors shrugged off North Korea's successful long-range missile launch.
The local currency stood at 1,075.0 at the end of domestic trade, compared to Tuesday's close of 1,076.7. It firmed as high as 1,073.6 during the day, which was the highest seen since early September last year.
The won pared a small portion of its gains after North Korea fired a long-range missile early on Wednesday, but traders were generally indifferent to the launch.
Dollar sales from local exporters during the session and risk appetite whetted by anticipation that the U.S. Federal Reserve may launch another round of bond-buying helped the currency regain its losses and rise later in the session.
In response to the North Korean rocket launch, the Bank of Korea and Finance Ministry opened emergency meetings and said they would be closely monitoring financial markets.
Finance Minister Bahk Jae-wan said that Pyongyang's missile launch would have a "limited effect" on the South Korean economy in a meeting with top ministry officials after markets closed.
The launch comes a day before the Bank of Korea's monetary policy committee holds a monthly rate-setting meeting, where it is widely expected to hold interest rates steady in the face of global uncertainties as well as a presidential election next week.
"The won slipped slightly on news of the North Korean missile launch, but the effects of it from here on out will be minute," said a foreign bank dealer in Seoul.
The benchmark Korea Composite Stock Price Index .KS11 finished up 0.6 percent, with foreign investors buying a net 209.5 billion won ($194.57 million) worth of South Korean stocks on Wednesday.
Local bond prices crawled up as investors took a wait-and-see stance ahead of a Federal Open Market Committee meeting later on Wednesday and a rate meeting in Seoul on Thursday. December futures on three-year treasury bonds added 0.02 points to 106.02.
Yield on the benchmark five-year treasury bonds added 1 basis point to 2.96 percent while yield on the three-year treasury bonds remained unchanged.
Close Prev close
Dollar/won 1,075.0 1,076.7
Yen/won 12.9901/984 13.0655/723
*KTB futures 106.02 106.00
5-yr treasury bonds 2.96 pct 2.97 pct
3-yr treasury bonds 2.83 pct 2.83 pct
Average call rate 2.79 pct 2.80 pct
^6-mth KORIBOR 2.90 pct 2.90 pct
KOSPI 1,975.44 1,964.32
* Front-month futures on 3-year treasury bonds
^ Korea interbank offered rate
($1 = 1076.7500 Korean won)
(Additional reporting by Yena Park and Lee Shin-hyung; Editing by Eric Meijer)