BOJ Rate Hike May Outshine Fed Decision for Won

The Bank of Japan's rate decision this Friday may have a more significant impact on the South Korean won than the Federal Reserve's rate hike next Wednesday, according to analysts. The BOJ is expected to raise its benchmark rate from 1% to 1.25%, which would be the highest level in 31 years.

This move would likely strengthen the yen, and under the current coupling dynamic, that strength would translate into won strength as well. In contrast, a Fed hike may do less to lift the dollar due to America's massive fiscal deficit and ongoing Middle East conflict.

A JPMorgan official was cited as saying that 'countries with higher rates may be able to withstand two to three hikes by the Fed.'