South Korea and Japan Vow to Counter Currency Depreciation, Bank of Korea Ready to Intervene

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South Korea and Japan Vow to Counter Currency Depreciation, Bank of Korea Ready to Intervene

## South Korea and Japan Express Concerns Over Currency Depreciation

South Korea and Japan have expressed serious concerns about the recent depreciation of their currencies, the South Korean Finance Ministry announced in a statement on Wednesday. Both countries are prepared to take action against excessive exchange-rate volatility.

During a meeting in Washington on Tuesday, South Korean Finance Minister Choi Sang-mok and his Japanese counterpart, Shunichi Suzuki, affirmed their readiness to deploy measures to stabilize excessive volatility in currency markets.

The recent depreciation is attributed to receding expectations of near-term U.S. interest rate cuts, which has pushed up the U.S. dollar against many currencies, including the won and yen.

The won strengthened on Wednesday, reaching 1,382.6 per dollar, a 1.26% increase from its 17-month low of 1,400 hit on Tuesday. The yen, meanwhile, hit a 34-year low of 154.79 against the greenback on Tuesday and stood at 154.64 yen in Asia on Wednesday.

Finance leaders from South Korea, Japan, and the United States are scheduled to hold their first trilateral meeting in Washington on Wednesday, coinciding with the International Monetary Fund and Group of 20 gatherings this week.

Markets are anticipating the possibility of yen-buying currency intervention by Japanese authorities, although analysts remain divided on the likelihood of such action as the dollar approaches the psychologically important level of 155 yen.

"There could be intervention if the dollar exceeds 155 yen, but the impact would be short-lived and limited," said Toru Suehiro, the chief economist at Daiwa Securities.

Separately, Bank of Korea Governor Rhee Chang-yong stated in an interview with CNBC in Washington that the central bank is prepared to deploy measures to calm the market, as the recent currency movements have been excessive.

While a weak currency can boost exports, it also puts pressure on households and retailers by increasing the cost of imported raw materials and food.