South Korean Officials Pledge To Monitor Markets Post-FOMC

The FOMC announced the start to tapering their asset purchase programme overnight, while insisting that this does not necessarily mean imminent interest rate hikes. South Korea's Dep FinMin Lee noted that the gov't sees limited impact from the decision on domestic financial markets, but will continue to watch Fed tapering and stands ready to enforce market stability.

• Meanwhile, Lee confirmed that South Korea will conduct an emergency buyback of KRW2tn of gov't bonds tomorrow, focusing on 5-10 year debt, to stabilise volatility in the bond market. The planned operation had been signalled earlier this week.
• Separately, the BoK pledged to strengthen market monitoring and take steps to stabilise markets if needed, including via gov't bond purchases.
• Spot USD/KRW last sits -3.65 at KRW1,177.95, with bears looking for a deeper sell-off past Oct 26 low of KRW1,164.05 towards the 100-DMA at KRW1,158.74. On the flip side, a jump above Oct 18 high of KRW1,188.40 would bring Oct 12 high of KRW1,200.35 into view.
• USD/KRW 1-month NDF last seen at KRW1,179.26, marginally below neutral levels. Bears set their sights on Oct 26 low of KRW1,165.03, while bulls would be pleased by a move through Oct 18 high of KRW1,189.22 towards Oct 12 high of KRW1,201.63.
• Looking ahead, South Korea's BoP current account balance will be published tomorrow.