A sign showing the exchange rates of the Korean won against other currencies, including the Japanese yen, at a foreign exchange booth in Myeongdong, a shopping mecca in Seoul, on June 16, 2023. (Yonhap)
SEOUL, June 18 (Korea Bizwire) — South Koreans’ combined purchase of the Japanese currency at local banks jumped nearly fivefold in May from a year earlier, data showed Sunday, as more people took advantage of a weaker yen.
The amount of Japanese currency sold at the country’s four major banks came to 30.16 billion yen (US$213 million) in May, soaring from 6.28 billion yen tallied a year earlier, according to the market data.
The increase apparently came as more people took advantage of the weak yen in recent weeks, which fell to an eight-year low against the won.
On Friday, the Korean won closed at 903.82 won against 100 yen, marking the highest level since June 2015, when it traded at 905.4 won.
The eased COVID-19 travel restrictions also induced more people to travel to Japan, with others purchasing the yen for future profits.
The amount of deposits in the yen at the four banks came to 810.9 billion yen as of Thursday, up 16 percent from 697.8 billion yen tallied in late May.
The latest slide in the yen comes as Tokyo continues to maintain its monetary easing policy, despite the rate hikes carried out by other major economies, including the United States and Europe.
Market watchers, meanwhile, warned that local investors should not bet on the yen for a short-term profit, as the currency may further lose ground down the road, possibly hitting 890 won per 100 yen in the near future.
“While the yen may be viewed as a safe asset, it may not be an appealing investment choice for those betting on a currency rebound,” said Baek Seok-hyun, an economist at Shinhan Bank, advising that the yen should not constitute a significant portion of one’s portfolio.
(Yonhap)
