SEOUL: The South Korean won extended gains for a second day but trading was quiet overall as investors contemplated what North Korea's next steps might be in the standoff gripping the Korean peninsula.
The local currency was quoted at 1,135.7 against the dollar at the end of onshore trade, up 0.3 percent compared to Tuesday's domestic close at 1,139.4.
The won nosedived to multi-month lows as North Korea ramped up tensions on the Korean peninsula, warning foreigners living in South Korea to evacuate the country on Tuesday.
Speculation has been rife that North Korea will fire one or more missiles with various ranges sometime soon to mark several anniversaries, including the 101th anniversary of the birth of North Korea founder Kim Il-Sung.
The local currency gained on Wednesday as South Korean exporters sold dollars against a weakened won for profit, traders said.
Some market participants said dollar-long positions were cleared as North Korea did not engage in any provocation during the local session, lifting the won.
"Market sentiment is very fragile towards North Korean news right now. There have been some who plan to sell dollars if Pyongyang fires a missile but for now, North Korean news is rather concerning," said a local bank dealer in Seoul.
The benchmark Korea Composite Stock Price Index was up 0.8 percent, with foreign investors net buyers of 34.8 billion won ($30.54 million) worth of South Korean stocks on Wednesday.
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