Won for Yen
The government announced on May 29 that it will discuss the resumption of Korea-Japan currency swaps, which were previously suspended in 2015, at the Korea-Japan Finance Ministers' Meeting to be held in Tokyo, Japan.
Choo Kyung-ho, deputy prime minister and minister of economy and finance, responded to the question, “Will Korea-Japan currency swaps be discussed at the Korea-Japan Finance Ministers' Meeting?” at a seminar held at the Korea Press Center in Seoul on June 8, saying “We plan to discuss the Korea-Japan currency swap, which was suspended in 2015.” He added, “We will do our best to achieve meaningful results.”
Korea-Japan currency swap policy, which began in July 2001 with a scale of US$2 billion, increased to US$70 billion by the end of 2011, but shrank as the extension of the contract was not achieved due to the deterioration of bilateral relations in 2012, and was finally suspended in 2015.
Given that the yen is already an internationalized key currency, it is expected that the conclusion of the Korea-Japan currency swap will help stabilize Korea’s foreign exchange market, which has seen increased volatility due to the tightening of U.S. currency.