The South Korean won and shares tumbled to the lowest in about three weeks early on Thursday after Japanese Prime Minister Shinzo Abe and U.S. President Donald Trump agreed that North Korea's missile launch was a "serious threat.
The South Korean won and shares tumbled to the lowest in about three weeks early on Thursday after Japanese Prime Minister Shinzo Abe and U.S. President Donald Trump agreed that North Korea’s missile launch was a “serious threat,” sparking geopolitical anxieties in the market. North Korea test-fired a ballistic missile into the sea off its east coast on Wednesday, ahead of a summit between Trump and Chinese President Xi Jinping this week.
The won stood at 1,132.2 to the dollar as of 0227 GMT, down 0.7 percent compared to Tuesday’s close of 1,124.4. It was the lowest intraday level since March 17. The Korea Composite Stock Price Index (KOSPI) was down 0.7 percent at 2,146.76 points, the weakest intraday level since March 16. “It is not North Korea’s missile launch itself but Trump’s firm stand over sanctions on Pyongyang that is triggering worries among investors and weighing on the local currency,” said Min Gyeong-won, a foreign exchange analyst at NH Futures.
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Min added that the won, however, is expected to resume gaining once this week’s Trump and Xi summit is over. Offshore investors were poised to be sellers for four straight sessions, offloading a net 69 billion Korean won ($60.99 million) worth of KOSPI shares near mid-session. Decliners outnumbered advancers 555 to 235. Steelmaker Posco dropped nearly 3 percent while Hotel Shilla rose nearly 1 percent. June futures on three-year treasury bonds shed 0.01 point to 109.51.
(Reporting by Dahee Kim; Editing by Eric Meijer)