Won Value Drops the Most in Five Years

Soared to 1,471 won per dollar during the day

Won-Yen surpasses 1,000 won per 100 yen

The won-dollar exchange rate has risen the most in five years. As the U.S. announced reciprocal tariffs followed by China's retaliatory tariffs, concerns about a global tariff war intensified, leading to a drop in the value of the won. The won-yen exchange rate soared above 1,000 won per 100 yen.

On the 7th, the won-dollar exchange rate (as of 3:30 p.m.) in the Seoul foreign exchange market ended weekly trading at 1,467.80 won, up 33.70 won from the previous trading day. After the political uncertainty cleared following the dismissal of President Yoon Suk-yeol on the 4th, the exchange rate, which had plummeted to the 1,430 won range, returned to its original position in just one day. The daily increase (33.70 won) was the largest in over five years since March 19, 2020, during the COVID-19 period (40 won). The exchange rate started at 1,462 won, up 27.90 won, and rose to 1,471.50 won during the day.

Lee Min-hyuk, a researcher at Kookmin Bank, analyzed that "trade war anxiety is stimulating a preference for safe assets." Wi Jae-hyun, an economist at NH Futures, predicted that "if foreigners exchange dividends for dollars this month, the exchange rate could rise further."

As the yen, a safe asset, showed strength, the won-yen fiscal exchange rate also rose significantly. As of 3:30 p.m., the won-yen exchange rate was 1,008.21 won per 100 yen, up 26.39 won from the previous trading day (981.82 won). It is the highest level in over three years since March 22, 2022 (1,011.75 won).

Reporter Kang Jin-kyu josep@hankyung.com