Won-Dollar Exchange Rate Surging After BOJ Decision Falls as Exporters Sell Dollars

The won-dollar exchange rate closed slightly lower on the 28th.

According to the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,337.7 won, down 0.3 won from the previous day.

On that day, the exchange rate opened at 1,339.0 won, up 1.0 won from the previous day, and then surged to 1,341.5 won around 1:15 p.m. following news that the Bank of Japan (BOJ), Japan's central bank, decided to maintain its large-scale monetary easing policy.

The BOJ decided to keep the short-term interest rate at -0.1% and continue its large-scale monetary easing policy aimed at guiding the 10-year government bond yield, a long-term interest rate indicator, to around 0%. The allowable fluctuation range for long-term interest rates was also maintained at approximately ±0.5%.

A foreign exchange market official said, "Following the BOJ's decision, the yen weakened and the won followed suit, putting upward pressure on the exchange rate," adding, "In the afternoon, as export companies sold dollars to settle accounts at the end of the month, the exchange rate gave back its gains and closed lower." It is also interpreted that the strong earnings of major U.S. big tech companies somewhat eased risk-averse sentiment, which contributed to the decline in the exchange rate.

[Image source=Yonhap News]

This content was produced with the assistance of AI translation services.