On the 26th, the won-dollar exchange rate opened at 1,446.1 won per U.S. dollar, down 19.7 won from the previous day. This is seen as the result of the yen strengthening on growing expectations that the U.S. and Japanese governments will intervene in the market to prevent further yen weakness. The won tends to move in tandem with the yen, meaning the won also strengthened as the yen rose (a decline in the won-dollar exchange rate).
On the 23rd, the previous trading day, news emerged that the Bank of Japan (BOJ) and the New York Federal Reserve had conducted a rate check in the foreign exchange market. A rate check refers to authorities inquiring with major banks and others about transaction conditions before intervening in the market.
Local media including The Wall Street Journal (WSJ) reported, "Following instructions from the U.S. Treasury, the New York Federal Reserve contacted financial institutions as potential counterparties to inquire about feasible transaction price ranges in the event of actual intervention." As a result, the dollar-yen rate, which was in the 159.1 yen range that day, fell to 155.6 yen. That is the largest drop in six months.
Min Kyung-won, a Woori Bank researcher, said, "The assessment that Japan and the United States could pursue policy coordination over the weekend to block further yen weakness led to a surge in the yen," adding, "The won-dollar exchange rate will likely fall further intraday, tracking the stronger yen."