Monday in Asia, the South Korean won strengthened to a 5-month high against the yen and a 10-day high against the dollar as a further gain in stock prices increased demand for emerging-market assets.
The stock market in South Korea opened higher today, unfazed by the rocket launch by North Korea on Sunday. Optimism that the rocket launch will have limited impact on the South Korean economy, positive closing by Wall Street and comments by Ben Bernanke that the initiatives to unclog the credit markets are beginning to yield positive results lifted the market sentiment.
The benchmark KOSPI Index opened today's session at 1,292, higher than its previous close of 1,284, and is currently trading at 1,313, up 29.40 points, or 2.29%. Almost all the sectors are advancing on optimism about recovery in the global economy.
The Federal Reserve Chairman Ben Bernanke said on Friday that programs to unfreeze credit markets are working. In a speech at a symposium on Financial Markets in Charlotte, North Carolina, Bernanke praised the actions of policymakers as lowering the cost and increasing the availability of credit.
The bevy of new lending programs offered by the Federal Reserve appear to be achieving their objectives, Bernanke said, having significantly reduced funding pressures for financial institutions, helped to reduce rates in bank funding markets, and increased overall financial stability.
The Bank of Korea will announce its monthly decision on interest rates on April 9 after unexpectedly keeping the benchmark rate unchanged at a record low of 2 percent last month.
The South Korean won climbed to a 10-day high of 1308.60 against the US dollar in Asian deals on Monday. This may be compared to Friday's closing value of 1337.10. If the Korean currency moves up further, it may likely target the 1306.6 level.
During Asian deals on Monday, the South Korean won rose to 13.0145 against the Japanese yen. This set the highest point for the won since November 06, 2008. On the upside, 12.5 is seen as the next target level for the Korean currency. The yen-won pair was worth 13.3295 at last week's close.
The low-yielding currencies like the U.S. dollar and the yen fell with the jump in equities as investors sell them to invest in riskier assets.
The Bank of Japan began its two-day policy meeting today and will announce the rate decision tomorrow. Analysts expect the central to keep rates steady at 0.1%.
Looking ahead, Japan will provide February figures for its leading index, with analysts expecting a score of 75.3 following the 77.2 market in January.
Across the Atlantic, the Fed governor Kevin Warsh will speak about the financial markets at a conference in Washington D.C. at 1:00 pm ET.
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