Won Slump Said Driven by Slide Of Japan's Yen

The Korean won slid Wednesday to a 28-month low against the U.S. dollar at 1,305.3 on the heels of the weakening Japanese yen.

The won was at 1,293 to the dollar in morning trading in foreign exchange markets, but when the yen slumped to 123.27 to the dollar, the won followed suit. The yen closed at 123.10.

"No problems are seen with dollar supplies on the market," a finance ministry official said. "I think the market is just too sensitive to the movement of the yen." A Bank of Korea representative agreed that "for the time being, the won's movement will be determined by the yen's value more than dollar supplies."

Exporters such as shipbuilders and chipmakers stand to benefit from the weakening won, while import-intensive firms like airlines and oil refiners will be hurt the most.

Shipbuilders, which had set projected foreign exchange rates at 1050-1150 won to the dollar in their business plans, are expected to record boosts in sales and operating income as are memory chip makers. But companies that depend on imports of raw materials will see their costs climb.

by Cheong Chul-gun