Finance chiefs of Korea, Japan vow ‘appropriate steps’ to curb FX market volatility
South Korean and Japanese finance ministers have voiced serious concerns over the sharp weakening of their currencies against the U.S. dollar and said they can take steps to curb market volatility amid escalating tensions in the Middle East, Seoul’s finance ministry said Wednesday.
The verbal intervention by South Korea’s Finance Minister Choi Sang-mok and Japan’s Finance Minister Shunichi Suzuki was made during their meeting in Washington on Tuesday (local time), according to the Ministry of Economy and Finance.
“Choi and Suzuki shared serious concerns over the recent depreciation of their currencies and mentioned that they can take appropriate steps in response to great volatility in the foreign exchange market,” the ministry said in a release.
Volatility in the foreign exchange market has grown recently after Iran launched a drone and missile attack against Israel over the weekend in response to a suspected Israeli attack on Iran’s embassy in Syria.
Concerns about a wider conflict in the Middle East have grown further, as Israel has hinted at potential retaliation, though the international community has called on Israel to show restraint.
On Tuesday, the Korean won had dropped to the closely watched level of 1,400 won per dollar during intraday trading for the first time since 2022 before ending at a fresh low for 2024 of 1,394.50 won.
The Japanese yen has also weakened markedly to fall as low as around the 154 level per dollar this week for the first time since June 1990.
The resurgent dollar also came as solid U.S. economic data have boosted bets the Federal Reserve would delay interest rate cuts amid still-high inflation.
During the meeting, Choi and Suzuki agreed to enhance bilateral relations for the economic development of their nations.
They also shared the need to strengthen communications and cooperation as partner nations that share common interests regarding international affairs and to work more closely through the Group of 20 nations meeting and various other multilateral frameworks.
The two sides plan to fix the schedule for their regular ministerial meeting soon, which was supposed to take place in South Korea, the ministry said.
The latest and eighth meeting of the finance ministers was held in Tokyo in June 2023.
Choi is in Washington to attend the first-ever trilateral talks with his U.S. and Japanese counterparts and the meeting of finance ministers and central bank deputies of the G-20 nations.