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| Signs of yen and yuan are posted at a foreign exchange booth in Seoul's shopping district of Myeong-dong, Monday. Yonhap |
By Yi Whan-woo
The Korean won made the fastest gains against the U.S. dollar among major Asian currencies over the past month, on the back of foreign investors' buying spree in the Korean financial market, data showed on Monday.
The Korean currency's ascent comes after being one of the worst performers in the region until several months ago, despite this year's depreciation in the value of the greenback from its highs in 2022.
According to Bloomberg, the value of the Korean currency advanced 5.19 percent to 1,271.90 per dollar as of June 16 from a month earlier.
It was the highest increase among the 11 major currencies in Asia.
During the cited period, the Japanese yen retreated 3.31 percent, while the Chinese yuan's value went down 1.96 percent, the Thai baht 1.56 percent and the Indonesian rupiah 0.82 percent.
The new Taiwan dollar ticked up 0.31 percent and the Singapore dollar rose 0.30 percent.
The won also marked the second-highest increase in value among 23 emerging market currencies, after the Colombian peso which gained 8.28 percent.
Correspondingly, stocks and bonds purchased by foreign investors amounted to $11.43 billion in May, according to the Bank of Korea (BOK). It marked the biggest amount in the 23 years it has been compiling relevant data.
"It appears foreign investors are attracted to the Korean stock market again as the downturn in the semiconductor industry is believed to have bottomed out," said Hana Bank researcher Seo Jung-hoon, noting chipmakers Samsung Electronics and SK hynix are among the large-cap stocks on the benchmark KOSPI.
Market observers said the foreigners' buying spree will continue for the time being. They assessed that China's stimulus efforts are playing a limited role and that foreigners are instead attracted to investing in proxy currencies of the yuan, such as the won and the Australian dollar.
Kim Seung-hyuk, an NH Futures analyst, speculated the Korean conglomerates' so-called "jabon reshoring," or "capital reshoring" is adding to the ascent of the Korean won.
The term refers to conglomerates bringing back massive earnings from abroad after the government eased tax rules on corporate income from outside Korea in order to spur domestic investment.
Asked how strongly the won will gain ground, Woori Bank analyst Min Kyung-won said it "can become as strong as the 1,250 level per dollar" as compared to Monday's won-dollar exchange that closed at 1,282 won per dollar.
The won weakened to its yearly low level of 1,340 per dollar in April.
The pace of its descent between February and April came to 8.34 percent, marking the steepest fall among Asian currencies.
Of the emerging markets, its downward pace was the third-highest after the Russian ruble's 11.4 percent fall and the Argentinean peso's 16.2 percent drop.
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