The USD/KRW exchange rate plunged to the 1,513 won range during London trading hours, dropping 17.20 won to 1,513.10 won at 8:26 PM versus the prior Seoul close of 1,530.30 won. The sharp decline followed news that Japan's Vice Finance Minister Mimura emphasized close communication with Korean FX authorities on recent market trends, heightening speculation of coordinated intervention. Market participants attributed the drop to thin trading conditions and suspected smoothing operations by authorities, with the level marking the lowest point since the June 17 intraday low of 1,509.10 won.
USD/KRW Opens at 1,528.90 Won Before Reversing Lower
The USD/KRW rate started around 6 AM at 1,528.90 won before hitting a ceiling at 1,531.90 won and reversing course. During Seoul trading hours, the USD/JPY rate exceeded 162 yen before plunging sharply, raising concerns that Japanese FX authorities could intervene at any time. This concern exerted downward pressure on USD/KRW as well.
At 8:26 PM, the rate stood at 1,513.10 won, down 16.90 won from the 6 AM New York close of 1,530.00 won. The dollar index held steady in the 100.8 range during the same period.
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USD/KRW tick chart
Mimura Confirms Close Coordination with Korean FX Authorities
Vice Finance Minister Mimura attended the opening ceremony of the Korea Investment Corporation (KIC) Tokyo office in Marunouchi, Tokyo. He stated, "We have been in particularly close contact with our Korean counterparts regarding recent market trends, including the foreign exchange market, and we will continue this cooperation going forward."
Mimura, known as "Mr. Yen," is recognized as a figure wielding significant influence over Japan's FX policy. Following his remarks, long sentiment in the Seoul FX market weakened, and the rate extended losses during the London session.
Dealers Attribute Drop to Intervention Speculation in Thin Trading
An FX dealer at a bank observed, "While the dollar index and other currencies remained calm, USD/KRW fell sharply. A large volume of dollar selling entered the thin market." The dealer added, "If we look for reasons, it can be attributed to the psychological impact of the Korea-Japan coordination news and suspected intervention by authorities."
At approximately 8:26 PM, the rate briefly touched 1,512.90 won, with market observers noting suspected smoothing operations during low-liquidity hours. This marked the lowest level since the June 17 intraday low of 1,509.10 won.
Market participants continue to monitor for further intervention signals and new developments regarding Korea-Japan FX cooperation. At the same time, USD/JPY traded at 161.911 yen (down 0.157 yen), EUR/USD at 1.14370 dollars (down 0.00051 dollars), and offshore USD/CNH rose to 6.7966 yuan.
FAQ
What caused the USD/KRW rate to drop to 1,513.10 won during London trading hours?
The rate fell 17.20 won to 1,513.10 won at 8:26 PM following news that Japan's Vice Finance Minister Mimura confirmed close communication with Korean FX authorities on market trends. Market participants suspected coordinated intervention in thin trading conditions.
What did Vice Finance Minister Mimura say about Korea-Japan FX cooperation?
At the KIC Tokyo office opening ceremony, Mimura stated that Japan has been in particularly close contact with Korean counterparts regarding recent market trends, including the foreign exchange market, and emphasized that this cooperation would continue.
