BlockBeats report: On July 31, market sources revealed that South Korea’s foreign exchange authorities conducted a rare intervention to sell U.S. dollars on Thursday, pushing the won to its highest level in nine months. This move by South Korea coincided with Japan’s intervention in the New York market on the same day, where it bought yen and sold dollars, pulling the yen back from a 40-year low. The won rose 2% against the U.S. dollar on Thursday to 1,418.0 won per dollar, the strongest level since October 20, 2022. The won had previously touched a 17-year low of 1,561.50 last month and has risen over 8% this month, on track for its largest monthly gain since March 2009.
A Korean finance ministry foreign exchange official declined to confirm the intervention. A Korean foreign exchange trader said the market suspected coordinated intervention by South Korea and Japan, as both countries had previously stated they would closely coordinate. On July 2, South Korea’s deputy finance minister stated at a press conference that Seoul was maintaining close communication with Japan and other major allies on foreign exchange matters. Japan’s top foreign exchange official followed up on July 7, saying Tokyo was in close communication with Seoul’s foreign exchange officials, citing that the financial markets of the two countries sometimes exhibit similar patterns of volatility.