Twin deficit, trade deficit Highest ever exchange rate 1,400 won to 144 yen to JPY

South Korea's exchange rate has entered the 1,400 won range from the largest trade deficit in history to a twin deficit, and the Japanese yen is continuing to break through the 144 yen per dollar level.
Korea's trade deficit reached a record high of $9.47 billion in August, and the Bank of Korea announced for the first time the possibility of a current account deficit next month.
After Chief Cabinet Secretary Hirokazu Matsuno told reporters he was concerned about the recent rapid and unilateral move and that Japan would have to take necessary action if it continued, the currency depreciated 0.6% to 143.71 per dollar and climbed to 144 yen intraday.
The won surpassed 1,380 won for the first time in 13 years and 5 months of the financial crisis.
The depreciation of the won broke through 1,300 won on June 23 and rose by 40 won in two months until July 23.
Yomiuri said on the 7th that “the yen continues to depreciate due to policy differences between major economies that raise interest rates and Japanese banks that maintain massive monetary easing,” said Tadade Kenta, senior foreign exchange strategist at Daiwa Securities. If interest rates need to be raised further without convergence, there is a possibility that the yen will weaken to the range of 140.5 to 140.50 yen," he said.
Japan's Mitsubishi Motors shares rose 84% on the day, making the biggest profit from the yen's sharp plunge in 24 years.
Japanese automakers showed a gap from South Korea's targeting of the US auto market in the revival of demand for small cars and pickups in Southeast Asia, which is recovering from the corona shock.
The Bank of Korea had a current account surplus of $1.09 billion in July as imports increased due to a slowdown in exports on the 7th, but the surplus fell sharply by $6.62 billion from the same month of the previous year. It cannot be excluded,” he said. Exports in August were $59.05 billion, up 6.9% year-on-year, while imports were $60.23 billion, up 21.2%.
Exports fell by 2.7% and 1.7%, respectively, from China and Japan.
Exports increased by 82.6% from exports of petroleum products, where imports are rapidly increasing, passenger cars and chemical products increased by 26.3% and 6.6%, respectively, and semiconductors increased by 2.5%. Imports increased by coal (+110.0%) and crude oil (+99.3%). Following a sharp increase in , gas (+58.9%) and semiconductors (+23.8%), consumer goods increased by 8.5%, predicting an expansion of the twin deficit from September.
The Bank of Korea (BOK) denied the remarks of Deputy Prime Minister Choo Kyung-ho of ‘the peak of late September and early October’, saying, “There is always a possibility that inflation will continue due to a rebound in raw material prices.”
The report said, "It is necessary to be aware of the possibility that the high inflation will be longer than expected due to the possibility of a rebound in raw material prices and the continued demand-side price pressure." It shows a high level of 4%.”
Regarding the trade deficit in the 'Recent Trade Deficit Cause and Sustainability Check' on the 6th, the Bank of Korea said, "The effect of the global economic slowdown will be in full swing and the trade deficit will continue for the time being due to the slowdown in exports and increase in imports." The current account is expected to maintain a surplus for the year due to the increase in customs exports and the main income surplus, but there is a high possibility of increasing volatility for the time being due to external uncertainties such as the prolonged war between Russia and Ukraine.”
Kim Young-hwan, head of the financial statistics department at the BOK's Economic and Statistics Bureau, told reporters on the 7th that "the growth of goods exports has slowed due to sluggish exports to China due to the slowdown in China's economy." The goods account will also be affected by the record of the largest deficit in the history of the account,” he said.