Wednesday morning in Asia, the South Korean won strengthened to a 2-day high against its US and Japanese counterparts on higher stock prices and positive economic reports from South Korea.
The stock market in South Korea opened strongly today, taking cues from the U.S. markets where the major averages ended higher on the last trading day of the first quarter on bargain hunting by investors at lower prices.
The benchmark KOSPI Index in South Korea opened today's session higher at 1,214, compared to its previous of 1,206, and is currently trading at 1,237, up 30.34 points, or 2.51%.
Manufacturers' sentiment rose for the second quarter of 2009 amid expectations that the economy will stabilize in the country. According to a report released by the Ministry of Knowledge Economy, business survey index (BSI) for manufacturing companies rose to 95 for the second quarter, compared to 61 in the first quarter.
In another report, the Ministry of Knowledge Economy revealed that trade surplus for March 2009 reached a record US$4.6 billion, attributing sharp decline in imports and increase in number of ships exported as the primary reason. The report noted that exports declined 21.2% to US$28.3 billion, and imports were down 36% to $23.7 billion
After a brief slide, the South Korean won gained against the dollar during early Asian deals on Wednesday. The pair moved from 1391.85 to 1354.10 by about 9:40 pm ET. This set a 2-day high for the won. On the upside, 1350 is seen as the next target level for the Korean currency.
In early Asian trading on Wednesday, the South Korean won strengthened to a 2-day high of 13.7355 against the Japanese yen. The next upside target level for the Korean currency is seen at 13.70. At yesterday's close, the yen-won pair was quoted at 13.8975.
In economic news, Japanese sentiment among large manufacturers plummeted at a record rate in the first quarter of 2009, posting a diffusion index score of -58, the Bank of Japan's Tankan Survey revealed today. That was worse than analyst expectations for -55 following a score of -24 in the previous quarter.
It was the sixth straight quarter of decline, and the fall of 34 points from the previous survey in December marked the largest fall on record. It was also worse than the previous record low of -57 in June 1975. However, the large manufacturers' outlook for the June quarter posted a mild recovery, coming in at -51.
Traders are now likely to focus on South Korea's inflation report for March, which is due out in the upcoming hours. Inflation is expected to climb 3.9 percent on year, down from 4.1 percent in February.
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