S. Korea, Japan finmins affirm that they will closely monitor FX markets, take appropriate measures on excessive volatility and disorderly movements - S. Korea ministry

South Korea and Japan’s finance ministers reaffirmed their commitment to addressing excessive volatility and disorderly movements in foreign exchange markets during the ninth Korea-Japan finance dialogue in Seoul. The ministers expressed “serious concerns” about the recent sharp depreciation of the Korean won and Japanese yen against the U.S. dollar, emphasizing the need for vigilance in policy actions to support economic growth and financial stability. The Korean won closed at 1,387.5 per dollar, nearing the 1,400 level, while the yen approached 160 per dollar, reflecting prolonged weakness amid geopolitical uncertainties and global market instability.

The two nations agreed to enhance bilateral and multilateral cooperation on economic and financial issues, including measures to curb currency fluctuations. They also discussed improving foreign investor access to South Korean government bonds and aligning policies to address shared challenges such as low birth rates and sustainable growth. A key outcome was the agreement to establish an annual deputy ministerial-level meeting and hold the 10th finance ministers’ dialogue in Japan next year.

South Korea’s Finance Minister Koo Yun-cheol separately highlighted structural pressures on the won, including speculative trading and dollar demand, but did not announce immediate policy measures to stabilize the currency. The Bank of Korea is expected to maintain its current interest rate stance amid ongoing volatility. Both countries remain focused on long-term strategies to balance market stability and investment returns, with no short-term interventions outlined at this stage.

The joint commitment underscores regional efforts to mitigate risks from global financial turbulence while fostering economic resilience through coordinated policy approaches.