Won Volatility Sparks Hopes for Currency Stability Amid Yen Intervention

US Treasury Secretary Scott Bessent has expressed concerns about excessive volatility in the Korean won. He stated that if the yen remains weak, other currencies will follow suit.

The won's recent movement in tandem with the yen has led to a weakening of its value against the dollar, with bigger swings than the Japanese currency. In May, the yen depreciated 2% against the dollar, while the won fell 4.6%. In June, the yen appreciated 3.8%, but the won weakened by 7.1%.

Bessent's remarks suggest that the won needs to move away from excessive weakness and return to a stable pattern. When the US and Japan intervened in foreign-exchange markets, the won strengthened, prompting market talk about potential South Korean intervention.