SEOUL: The South Korean won edged higher in domestic trade on Thursday, boosted by dollar-selling from local exporters in the absence of major positioning by investors as the year draws to a close.
The local currency was quoted at 1,072.2 against the dollar at the close of onshore trade, compared with 1,073.2 at the end of the Seoul session on Wednesday.
Won demand from exporters seeking to convert their contract payments lifted the currency throughout the session. But dealers said local foreign exchange authorities intervened to slow the currency's gains towards the end of the day.
"The authorities are suspected to have started intervening once the dollar traded below 1,072 won, and it appears that they want to ensure the dollar doesn't fall below 1,070 tomorrow," a foreign bank dealer said.
The local currency is up by more than 7 percent against the greenback and by more than 20 percent against the yen, raising concerns that local exporters could be hurt further.
Some dealers also said the won's initial rise was supported by those shorting the yen against the won. The Japanese currency has been broadly weaker in recent weeks on expectations for additional monetary easing to boost economic activity.
The benchmark Korea Composite Stock Price Index ended up 0.3 percent at 1,987.35. Foreingers were net sellers of 167.0 billion Korean won ($155.59 million) worth of local shares on Thursday.
Local bonds edged up on bargain hunting and renewed hopes for additional Bank of Korea rate cuts after the central bank said it would focus on supporting growth for the time being.
March futures on three-year treasury bonds ended up 0.06 points at 105.82.
The yield on the benchmark five-year treasury bonds fell by two basis points, while the yield on three-year treasury bonds dropped three basis points.
Center>Copyright Reuters, 2012
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