The Bank of Korea (BOK) activated a Middle East situation financial market task force (TF) to monitor domestic and overseas financial and foreign exchange market volatility around the clock and respond immediately if needed, following the United States and Israel's airstrikes on Iran.
The Bank of Korea (BOK) said it held a "Middle East situation check TF meeting" on the 3rd, chaired by Governor Rhee Chang-yong, to review trends in the international financial market and the impact on domestic finance and the economy after the United States and Israel's airstrikes on Iran.
The Bank of Korea (BOK) also held a videoconference on the 28th, the day of the U.S. airstrikes on Iran, to check market conditions. At 9 p.m. on the 2nd, it reviewed Asian and European financial market conditions based on reports from its overseas offices.
According to the Bank of Korea (BOK), in the international financial market the previous day, geopolitical risks came to the fore and energy prices rose sharply. West Texas Intermediate (WTI) crude oil jumped 6% from the previous day, and Dutch TTF natural gas surged 39.3%. Yields on major countries' Government Bonds also climbed. The U.S. 10-year Treasury yield jumped 10 bp (1 bp = 0.01 percentage point), Germany's rose 7 bp, and the United Kingdom's rose 14 bp.
By contrast, safe-haven assets the U.S. dollar and gold rose. The U.S. dollar index (DXY), which shows the dollar's value against six major currencies, rose 1%, and gold gained 0.8%. Meanwhile, against the dollar, the euro fell 1%, the yen 0.9%, and the pound 0.6%.
The Bank of Korea (BOK) said, "Since the domestic financial and foreign exchange markets open for the first time on the 3rd after the Middle East situation came to the fore, we will closely examine market reactions and how related risks unfold," adding, "We plan to discuss the possibility that the current Middle East situation will continue for a considerable period, the resulting financial and economic impacts, and response measures by scenario."