“The verbal jawboning on Christmas eve still has its effects, while a combination of broader risk-on sentiment, dollar softness and strong yuan fixing adds” to the rally in the won, said Christopher Wong, a currency strategist at Oversea-Chinese Banking Corp. The dollar-won pair may drop further in 2026 if it closes below 1,415, he added.
Apart from the stern warning issued on Wednesday, authorities also announced a package of new tax measures to help stabilise the foreign-exchange (forex) market, while the National Pension Service implemented a new strategic currency hedging.
Policymakers were prompted to act after traders had pushed the won towards the psychologically important 1,500 level — a threshold breached only during the global financial crisis and the Asian currency meltdown in 1997. A sharply weaker currency risks importing inflation, accelerating capital outflows and could erode foreign investor confidence.
See also: Yen carry trade a ‘ticking time bomb’, warns BCA Research
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