SEOUL: The South Korean won ended lower in domestic trade Wednesday, weighed down by short-covering on the yen by offshore players as well as selling by investors locking in recent gains.
The local currency was quoted at 1,058.7 against the dollar at the end of onshore trade, compared with 1,056.5 at the end of the Seoul session on Tuesday. This marked the third consecutive day of declines.
Dealers said a warning by Japanese Economics Minister Akira Amari that excessive yen weakness could hurt consumers led to unwinding of short positions on the yen against the won. Offshore players were seen buying dollars as they unwound their bets against the Japanese currency.
"The market is going through a correction but the 1,060 mark is seen as the support level for the won because of exporters' dollar-selling," one local bank dealer said.
Continuing concerns that local foreign-exchange authorities might intervene and take regulatory steps to slow the won's appreciation also kept investors wary of betting aggressively on the won's rise.
But dealers said the won will likely continue strengthening over the course of the year as the global economy improves and major central banks retain their growth-supportive policies.
The benchmark Korea Composite Stock Price Index ended down 0.3 percent at 1,977.45. Foreigners were net sellers of 91.6 billion won ($86.70 million) worth of local shares.
Local bonds were nearly flat in the absence of major cues. March futures on three-year treasury bonds ended down 0.01 points at 106.33.
Yield on the benchmark five-year treasury bonds ended unchanged from Tuesday's close, while yield on the three-year treasury bonds ended up by one basis point.
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