SEOUL: The South Korean won firmed on Thursday as the dollar came under pressure as investors pondered the implications of a potential tapering back of the Federal Reserve's massive monetary stimulus programme.
The won stood at 1,127.4 against the dollar at the end of domestic trade, up half a percent from Wednesday's onshore close of 1,132.9, when it fell close to a 7-week low.
Local exporters also supported the won as they sold dollars for month-end settlements, investors said, although it was not the key factor for the won's rally.
"The market today was mostly influenced by the level of the dollar against the yen," said a local bank dealer in Seoul.
"I didn't get the feeling there was an abundance of dollar sales from exporters and the tumble in Japanese stocks had little effect (on the won)."
The yen pulled away from a nearly three-week high against the dollar, while the Nikkei share index tumbled 5.2 percent.
The benchmark Korea Composite Stock Price Index finished flat at 2,000.10 points. Foreigners were net buyers of 231.1 billion won ($203.99 million) worth of South Korean stocks on Thursday.
Local bond prices were unchanged after a sharp fall on Wednesday when foreigners dumped a record 4.5 trillion won ($3.97 billion) worth of contracts. June futures on three-year treasury bonds remained at 106.28.
Yield on the five-year treasury bonds and yield on the three-year treasury bonds were also unchanged at 2.85 percent and 2.75 percent, respectively.
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