South Korean Won: Policy support tempers KRW losses – MUFG
FXStreet
Last updated: June 9, 2026
South Korean AI-heavy equities experienced a sharp correction, potentially increasing selling pressure on the Korean Won. This occurred after the USD/KRW pair reached a new high following strong US jobs data, but subsequently fell due to emergency foreign exchange measures implemented by South Korean authorities.
- MUFG's Hardman noted that the significant decline in South Korea's equity market, heavily influenced by AI tech stocks like Samsung Electronics and SK Hynix, could exacerbate the selling pressure on the Korean Won. Foreign investors have been substantial sellers of Korean equities throughout the year.
- The USD/KRW exchange rate reached a new peak of 1,562.3 on Friday, influenced by a robust Non-Farm Payrolls report. However, it depreciated by approximately 1.5% overnight in reaction to emergency measures introduced by domestic policymakers to bolster the Won.
- South Korea revealed a comprehensive response plan. This plan involves enhanced oversight of offshore currency derivatives, inspections targeting suspected market misconduct, and investigations into potentially illegal foreign exchange transactions. These actions were decided upon during an emergency meeting involving the heads of the Bank of Korea and financial regulators.
- These recent measures complement earlier initiatives, such as permitting the National Pension Service to expand its foreign exchange hedging activities and relaxing regulations to improve dollar liquidity.
