South Korea's foreign exchange authorities conducted a rare dollar-selling intervention on Thursday, July 31. A market source told Reuters about the action, declining to be identified.
The intervention sent the South Korean won to a nine-month high. The currency strengthened 2 per cent on Thursday to 1,418.0 per dollar, its strongest level since October 20.
A foreign exchange official at South Korea's finance ministry declined to confirm the intervention. The won had hit a 17-year low of 1,561.50 per dollar last month.
Regional coordination
Japan conducted a yen-buying, dollar-selling market intervention in New York markets on Thursday. This action pulled the yen from four-decade lows.
It is suspected that South Korea and Japan intervened together, since the countries said they would coordinate closely, according to a South Korean currency trader.
On July 2, South Korea's vice finance chief said in a press conference that Seoul was closely communicating with Japan and other key allies on foreign exchange issues.
On July 7, Japan's top currency diplomat said Tokyo was closely communicating with Seoul's foreign exchange officials as the financial markets of Japan and South Korea sometimes exhibit similar movements.
The South Korean won has gained more than 8 per cent this month, set for its biggest monthly jump since March 2009.