The South Korean won per 100 yen rose to the 850 won level, the highest since the global financial crisis. The won strengthened due to the market’s disappointment with the Bank of Japan’s (BOJ) monetary easing policy, deepening the yen’s weakness and fueling risk appetite.

On the Seoul Foreign Exchange Market on Thursday, the won value against 100 yen stood at 856.80 won at the market’s closing at 3:30 p.m. It is the highest level in 15 years and 10 months since the 853.92 won level seen on January 11, 2008.

The rise of the won comes as the yen weakens globally. “Investors’ disappointment over the BOJ’s hesitancy to normalize monetary policy is weighing on the yen value,” Shinhan Bank Co. economist Baek Seok-hyun said. “Expectations also grew for an end to monetary tightening as U.S. inflation slowed, reviving risk appetite and raising the won value against the yen.”

The yen value has been fluctuating around 150 yen against the greenback since the end of October 2023 and was on the verge of collapsing to 152 yen on Monday. It traded around 151.30 yen per dollar that day as investors continued to sell the yen. The sharply widening short-term interest rate gap between the United States and Japan is also fueling the yen carry trade, according to analysts.

“After breaking the psychological resistance level of 150 yen, the market is confidently betting on a weaker yen, which is accelerating the yen’s decline,” NH Futures Co. analyst Kim Seung-hyuk said. But other observers believe that the Japanese government will intervene verbally if the yen rises above 152 to 153 yen per dollar to prevent a further decline in the yen value.

Meanwhile, on the Seoul Foreign Exchange Market, the won value closed at 1296.9 won per dollar, up 3.9 won from the previous trading day and at its highest level in about four months since 1283.8 won on August 1, 2023. The slight increase in the won was due to the dollar’s recent weakness. U.S. Treasury yields dropped, and the dollar weakened as the U.S. Federal Open Market Committee (FOMC) kept interest rates unchanged earlier in the month and recent U.S. economic data reinforced speculation of an end to tightening.

By Lim Young-sin and Choi Jieun

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