Won Strengthens as Dollar Weakness Continues Unabated

The South Korean won has experienced significant appreciation, prompting forecasts that the USD/KRW exchange rate will break below 1,300. Despite strong U.S. employment data and rising Treasury yields, dollar weakness persists, compounded by a dollar supply surplus in South Korea's foreign exchange market.

iM Securities notes that even though the U.S. August employment report exceeded market expectations, the dollar decline was insufficient to reverse its weakening trend.

The yen has risen sharply, supported by comments from U.S. Treasury Secretary Bessent calling on Japan to implement additional benchmark rate hikes and wariness over possible Japanese government intervention in the currency market.