Japanese yen near 8-year low against S.Korean won

The Japanese yen is nearing its lowest level in eight years against the South Korean won, with their exchange rate hovering around the 9.00 level.

It was quoted at 9.12 per won in Seoul trade on Wednesday afternoon, down 9.1% from its year-high of 10.03 touched in early April.

In the morning, it briefly fell below the 9.10 point. Since the end of last month, it has traded below the 9.5 level, below the psychologically important barrier of 10.00.

The yen has shed 4% against the won over the past two weeks. Compared to the Jan. 2 exchange rate, the yen/won rate declined by 6.1%.

The Japanese currency turned south in the second half of last year and has been range-bound between 9.50 and 10.00 in recent trade.

The South Korean currency has gained ground on expectations of a rebound in the semiconductor industry, the bread-and-butter of the South Korean economy.

Steady US interest rates lent support to the won, while the Japanese yen has been under pressure from its ultra-low interest rates.

HI Investment & Securities analyst Park Sang-hyun said the yen has more room to fall and would test the 8.00 won resistance level. If so, it will be the first time the yen/won exchange rate trades in the 8.00 range since June 25, 2015.

On the contrary, Meritz Securities analyst Park Soo-yeon said the yen's depreciation against the won in the past few months is overdone.

Meanwhile, the dollar weakened to the won in local trade, ending at 1,278.50 to the won on Wednesday. That compared to its highest level of 1,342.1 this year hit on May 2, 2023.

Write to Jin-gyu Kang at josep@hankyung.com

Yeonhee Kim edited this article.