South Korean finance officials reported close consultations with Japan and other leading partners over foreign exchange issues, and cautioned that the won has diverged markedly from the country's economic fundamentals.
Huh Chang - one of two vice finance ministers who oversees forex matters - told reporters that Seoul and Tokyo maintain frequent exchanges of information on currency developments. "We are always working closely with Japan and other relevant countries and exchanging information very closely," he said when asked whether South Korea might participate in any joint steps with Japan to steady markets.
Huh added a pointed assessment of the domestic currency's position, saying: "The won is currently misaligned compared to the economy’s fundamentals." He did not provide additional specifics about any planned market interventions, but emphasized the government's readiness to act if episodes of illiquidity drove excessive price swings in the dollar-won market.
Those remarks arrive just days before a planned expansion of trading hours for the dollar-won pair to a continuous 24-hour cycle on Monday. Huh declined to elaborate on the mechanics of any intervention, instead underlining the authorities' preparedness to deploy measures should they judge market conditions warranted such steps.
Another deputy finance minister, Moon Ji-sung, joined Huh at the briefing and said Seoul has been keeping open lines of communication not only with Tokyo but also with Washington on foreign exchange matters. Moon said the government expects some trading that currently takes place in the offshore non-deliverable forward (NDF) market to shift toward the onshore spot market as onshore hours are lengthened, and that officials were "reviewing measures to encourage that."
The warning from Seoul corresponds with a weak won, which is trading close to a 17-year low versus the dollar. The currency has fallen 7.4% against the greenback so far this year, a slide that stands in contrast to local equities, where the benchmark KOSPI index has risen about 85% over the same period.
Huh's comments also came shortly after reports that Japanese officials are moving toward more aggressive, untargeted tactics aimed at traders betting against the yen, which has been described as trading near multi-decade lows. South Korean officials did not provide detail on any coordinated policy steps with Japan beyond describing ongoing information exchanges.
Officials framed their remarks around stability: signaling active diplomatic and technical cooperation while stopping short of disclosing operational responses. They stressed monitoring of market liquidity and the potential for onshore market deepening as trading hours are extended.
Summary of key developments
- Seoul says it is communicating closely with Japan and other key partners on FX matters.
- Vice Finance Minister Huh Chang warned the won is misaligned with fundamentals and said the government stands ready to stabilize markets if needed.
- Deputy minister Moon Ji-sung noted expectations that offshore NDF trading could migrate to the onshore spot market as onshore trading hours are extended.