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☆ Analysis: G7 fails to reach intervention deal to ease pain of soaring dollar
▼ + stars: | 2022-10-16 | by ( Leika Kihara | ) www.reuters.com time to read: +7 min

Banknotes of Japanese yen and U.S. dollar are seen in this illustration picture taken September 23, 2022. With a strong push from Japan, finance leaders of the Group of Seven advanced economies included a phrase in a statement on Wednesday saying they will closely monitor "recent volatility" in markets. "Many countries saw the need for vigilance to the spill-over effect of global monetary tightening, and mentioned currency moves in that context. "I've said on many occasions that I think a market-determined value for the dollar is in America's interest. "It's impossible to reverse the yen's downtrend with solo intervention," said Daisaku Ueno, chief forex strategist at Mitsubishi UFJ Morgan Stanley Securities.

☆ Bank of Korea governor says policy guidance harder with won's weakness
▼ + stars: | 2022-10-15 | by ( ) www.reuters.com time to read: +2 min

SEOUL, Oct 15 (Reuters) - South Korea's central bank governor said on Saturday external factors, such as aggressive U.S. policy tightening buoying the dollar and driving the won currency sharply down, made providing forward guidance on policy difficult. The Bank of Korea delivered its second-ever 50-basis-point rate hike on Wednesday and made clear the won's 6.5% slide in September that drove up import costs played a key role in the decision. "I have learned that communication with the public is not easy when transitioning from the traditional strategic ambiguity to forward guidance," Rhee said. He said that while the central bank was not targeting a specific level for the exchange rate, "it has to consider how a sharp rise in the exchange rate would affect financial stability conditions, such as capital outflow pressures." Register now for FREE unlimited access to Reuters.com RegisterReporting by Jihoon Lee Editing by Tomasz JanowskiOur Standards: The Thomson Reuters Trust Principles.

☆ South Korean household loans shrink sharply in Sept as rates rise
▼ + stars: | 2022-10-13 | by ( ) www.reuters.com time to read: +2 min

SEOUL, Oct 13 (Reuters) - South Korean households' loans from banks fell by the biggest amount in more than a year in September amid rising interest rates and an extended property market slowdown, further clouding the outlook for Asia's fourth-largest economy. Bank lending to households, including policy mortgage loans, shrank 1.2 trillion won ($840.96 million) in September, after a 0.3 trillion won gain in August, according to Bank of Korea data on Thursday. Growth in housing mortgage loans slowed to 0.9 trillion won, from 1.6 trillion won in the previous month, while other lending decreased by 2.1 trillion won, led by credit loans. South Korea's central bank has been aggressive in raising interest rates since August last year to tame the world's highest household debt and surging inflation. read moreThe country's property market has abruptly gone from sizzling hot to floundering.

Joo and Shin voted for a smaller hike in the rate, Rhee said in news conference, but did not elaborate on their views. Twenty-three of 26 analysts expected the bank to go for a half-point hike in a Reuters poll, while the remaining three expected a quarter-point hike. The median forecast in the poll showed the BOK's base rate going to 3.25% by year-end and then peaking at 3.50% in the first quarter of 2023. Almost half of respondents in the Reuters poll expected the base rate to reaching 3.75% in the first quarter of next year. After Wednesday's rate hike, the Korea Federation of Small- to Medium-sized Enterprises expressed "serious concern" about higher rates.

The Bank of Korea (BOK) raised its benchmark policy rate (KROCRT=ECI) by 50 basis points to 3.00% on Wednesday, bringing total rates hike since August last year to 250 basis points. Twenty-three of 26 analysts expected the bank to go for a half-point hike in a Reuters poll, while the remaining three expected a quarter-point hike. "The 50 bp hike today was the BOK's response to the sinking won, it seems." South Korea's three-year treasury bond futures fell after the BOK's statement on the decision. The median forecast in the poll showed the BOK's base rate going to 3.25% by year-end and then peaking at 3.50% in the first quarter of 2023.

☆ Asia-Pacific markets mixed amid fears of slowing growth; yen weakens past 146
▼ + stars: | 2022-10-12 | by ( Abigail Ng | ) www.cnbc.com time to read: 1 min

Asia-Pacific markets were mixed on Wednesday amid concerns over the global economy and ahead of the Bank of Korea's rate decision. The Nikkei 225 in Japan was lower by about 0.2% while the Topix lost 0.15%. MSCI's broadest index of Asia-Pacific shares outside Japan was little changed. South Korea's central bank is expected to raise interest rates by 50 basis points to 3% on Wednesday, according to a Reuters poll. The Korean won last changed hands at 1,432.30 per dollar.

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