Japan and South Korea Jointly Interfering with Exchange Rates? Korean Won Hits 9-Month High, Yen Sees Largest Daily Gain in Over Two Years

The South Korean won appreciated to a nine-month high against the US dollar early today (31), following suspected currency stabilization operations by Seoul's foreign exchange authorities.

Around 6:00 AM Seoul time, the won strengthened to 1,418 per dollar, marking its highest level since October 20, 2025. As of 9:37 AM local time today, the exchange rate stood at 1,430 won per dollar.

The won's appreciation coincided with a rise in the Japanese yen. During Thursday's (30th) New York trading session, the yen surged nearly 3.3% against the dollar, marking the largest intraday gain since December 2023. Markets widely speculate that Japanese authorities intervened.

Lee Min-hyuk, an analyst at KB Kookmin Bank in Seoul, noted the strong correlation between the won and yen, fueling speculation that both countries' foreign exchange regulators may have entered the market.

He speculated: 'The overnight strength of both the won and yen may indicate that Korean and Japanese authorities have jointly intervened.'

Markets are now closely watching the Bank of Japan (BOJ) policy decision. Governor Kazuo Ueda's press conference will determine whether the yen's rebound signals a trend reversal or a temporary spike. The BOJ is expected to keep its policy rate unchanged at 1%, a decision likely to gain broad support from the policy board. The BOJ will also release its quarterly outlook report, including updated forecasts for economic growth and inflation. Supported by resilient domestic activity and strong demand from AI-related investments, policymakers may revise Japan's growth outlook upward.

After the yen's sharp rise, the Japanese government refrained from confirming whether it intervened in the foreign exchange market during overnight trading, but hinted at support from overseas counterparts, including U.S. officials.

Today, Finance Minister Shunichi Suzuki avoided confirming whether the yen's surge was due to intervention, stating only that the government would 'remain highly vigilant and take appropriate measures.'

Shortly afterward, Japan's foreign exchange chief, Junichi Shimomura, suggested ongoing support from U.S. and other international counterparts.

Shimomura said, 'We are indeed aware that the support we receive from the U.S. goes beyond mere moral support,' and added that he maintains close contact with U.S. authorities through personal channels, though he declined to provide further details.