Their Finance Ministers will continue to take appropriate actions against excess volatility and disorderly movements in exchange rates
Finance ministers of South Korea and Japan used a bilateral meeting in Seoul on Tuesday (Jun 25) to express a shared concern about sharp declines in their currencies and vowed to take steps to defend them.
South Korean Finance Minister Choi Sang-mok and Japanese Finance Minister Shunichi Suzuki said in a statement that they “shared serious concerns about the recent sharp depreciation of the Korean won and the Japanese yen.”
The ministers “reaffirmed that they continue to take appropriate actions against excess volatility and disorderly movements in exchange rates,” the statement said.
Tuesday’s meeting follows an April trilateral meeting of finance chiefs in Washington DC where the pair won acknowledgement from US Treasury Secretary Janet Yellen about their currency concerns.
Comments from the bilateral meeting will be closely watched by market participants. The yen is hovering near 160 to the dollar – a level at which Japanese authorities intervened to prop up the currency earlier this year – while the won, down about 7 per cent against the greenback this year, has slid towards the key 1,400 per dollar level.
“The two countries have become closer neighbours,” South Korea’s Choi said in opening remarks for the meeting. “Last year, the two countries resumed currency swaps and shared the seriousness of rapid financial market volatility, providing strong support to each other.”
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The statement may fuel speculation that Japanese and Korean officials could coordinate foreign exchange intervention, but South Korea’s deputy finance minister for international affairs, Choi Ji-young, said this was not specifically discussed, adding that it was up to each country.
In a win for South Korea, the pair welcomed Seoul’s recent efforts to improve foreign investor accessibility, including reforms made to add the nation’s securities into the FTSE World Government Bond Index.
South Korea’s FX authorities on Friday said it expanded its currency swap with the National Pension Service to US$50 billion from US$35 billion to defend the tumbling won against the dollar. REUTERS
