Yen, Preference for safe assets surpasses 1000 won...Won continues to weaken
Yen Emerging As A Safe Asset (Source: Newsis)
As The Value Of The Yen Recently Surpassed The 1000 Won Level, The Movement Among Investors Preferring The Yen Over The Dollar Is Becoming More Evident. Concerns About An Economic Slowdown Triggered By President Trump's Tariff Policies Are Shaking Confidence In The Dollar, While The Yen Is Being Reappraised As A Safe Asset. In Contrast, The Won Is Under Pressure To Decline Amid The Prolonged U.S.-China Conflict And Low Growth Outlook.
According To The Bank Of Korea On The 22Nd, The Previous Day's Exchange Rate Of The Won To The Yen Stood At 1007.7 Won Per 100 Yen. A Year Ago, The Won-Yen Exchange Rate Hovered In The High 800 Won Range, Entering The 900 Won Range Last July And Consistently Rising Until Recently Surpassing The 1000 Won Level. This Is A Result Of The Yen Growing Strong While The Won Is On A Weakening Trend.
In The Global Financial Market, Demand For Yen Is Continually Increasing. After President Trump's Comprehensive Tariff Policies, The Possibility Of A Slowdown In The U.S. Economy Was Raised, Causing The Yen To Emerge As A Safe Investment. In Addition, With The Possibility Of A Rate Hike From The Bank Of Japan And Expectations Of Structural Changes In The Japanese Economy, The Value Of The Yen Has Reached Its Highest Level Against The Dollar In 7 Months. The Yen-Dollar Exchange Rate Once Dropped To 140.55 Yen, The Lowest Level Since Last September.
On The Other Hand, The Won Is Not Gaining Momentum, Coupled With Global Trade Uncertainty And Domestic Economic Slowdown Concerns. South Korea's Export-Centric Economy Is Directly Affected By The Intensification Of The U.S.-China Conflict, And As A Result, The Won Is Clearly Considered A Risk Currency.
In The Market, There Is A Prevailing View That If This Trend Continues, The Won-Yen Exchange Rate Could Rise To The 1050 Won Range By The End Of The Year. Goldman Sachs Predicts That The Bank Of Japan Will Gradually Raise Interest Rates And Sees The Possibility Of The Yen-Dollar Exchange Rate Falling To 135 Yen By Year-End. Thus, The Won-Yen Exchange Rate Is Analyzed To Have More Room To Rise.
Researcher Choi Yae-Chan Of Sang Sang Securities Explained That "Funds Are Flooding Into The Yen With The Dollar Losing Power And The Won Is Classified As A Risk Asset, Presenting An Upward Trend In The Won-Yen Exchange Rate." Researcher Lee Jung-Hoon Of Eugene Investment & Securities Also Projected That "Even If It Seems An Excessive Trend In The Short Term, The Won-Yen Could Rise To Around 1020 Won In The Mid-To-Long Term.
With Capital Moving From The Dollar To The Yen, The Won-Yen Exchange Rate Is Expected To Maintain An Upward Momentum For A While. With Economic Uncertainty Continuing, Investors' Strategic Adjustments Are Expected To Accelerate As The Yen Recovers Its Status As A Safe Asset.