Senior foreign exchange officials from South Korea and Japan met in Tokyo on Friday and pledged to strengthen cooperation and maintain close contact amid volatility in Asian currency markets. The meeting came after joint currency intervention by the United States and Japan in late July helped support both the yen and the won. South Korea's Ministry of Economy and Finance said Deputy Minister Moon Ji-sung met with Japan's Vice Finance Minister for International Affairs Atsushi Mimura. The two sides exchanged views on the latest global economic and financial market conditions, as well as each country's policy responses. They also discussed issues within multilateral cooperation frameworks, including ASEAN+3 and the G20, and preparations for the 11th South Korea-Japan finance ministers' meeting, which Seoul will host. They agreed to maintain close contact at both working and senior levels. The talks marked the first high-level contact between the two countries since the events of July 31, when Japan and the United States jointly bought yen, just one day after Japanese authorities intervened in the market to support the currency. On that day, Moon said foreign exchange authorities from the United States, South Korea, and Japan were in close coordination, although he did not confirm whether South Korea also intervened. The moves pushed the yen and the won stronger in the same direction in late July. Since then, however, the two currencies have diverged, with the yen giving back some of its post-intervention gains while the won continued to strengthen to an 11-month high. The talks between Seoul and Tokyo therefore took place at a time when the two countries face different currency challenges but still need to coordinate policy closely amid global financial market volatility and movements in the US dollar.
Joint intervention and policy coordination support yen, weakening USD/JPY
Cooperation and intervention support won, weakening USD/KRW
