Yen breaches key level vs Korean won to hit 8-year low

The Japanese yen on Monday extended losses against the South Korean won to touch an eight-year low, briefly breaching a psychological support line after the monetary authority in Tokyo pledged to keep an ultra-easy policy last week.

The yen broke through the psychologically important barrier of 9 earlier in the day to be quoted at as low as 8.97 to the won, the weakest level since June 2015, down 11.1% down from early April when the Japanese currency hit a one-year peak versus the local unit.

The major currency recovered the level to trade at 9.05 later when South Korea’s local currency market closed with the won down 0.8% against the US dollar.

The yen came under pressure as the Bank of Japan stuck to its accommodative monetary policy.

The central bank on June 16 maintained its -0.1% short-term interest rate target and a 0% cap on the 10-year bond yield set under its yield curve control policy, as widely expected.

BOJ Governor Kazuo Ueda said he was still waiting for signs of more sustainable inflation, indicating the central bank is unlikely to shift its loose monetary policy anytime soon.

That compares with other major central banks’ fight against inflation. The US Federal Reserve on June 14 skipped its interest rate-hike campaign but signaled its support for two more increases this year.

Write to Do-Won Lim at van7691@hankyung.com
 

Jongwoo Cheon edited this article.