Won soars to its highest value vs. yen in 5 years

The won-yen exchange rate fell to a five-year low Friday, signaling a repeat of the impact of a weak yen on the Korean economy.

The won closed at 1,060.11 per 100 yen Friday, marking its highest value since September 2008. The yen stood at 100.19 against the U.S. dollar.

Japan’s Nikkei 225 Stock Average surged 7.7 percent last week, climbing above the 15,000 level for the first time since May and posting its steepest weekly rally in nearly four years, according to data complied by Bloomberg.

The won’s value surged 8.3 percent during between late June and late October.

Some analysts expressed worries about a “third attack” of the low yen against the Korean economy, but the majority of market analysts say the weakening yen will no longer have much impact on Korean export industries such as IT and automobiles. They cite the strong competitive position that Korean businesses have built against Japanese products.

“When the won-yen rate fell 10 percent from 1992 through 2002, Korea’s exports declined 3.3 percent, but in the period between 2003 and 2013, exports dropped 1.4 percent only,” said Lee Ji-seon, a researcher at LG Economic Research Institute. “This means that as Korean companies make more of their products abroad, the exchange rate affects their exports less than before, and many Korean products have sufficient competitive edges over Japanese rivals.”

BY SONG SU-HYUN [ssh@joongang.co.kr]