It is not large news in the international press, but make no mistake: the JPY/KRW foreign exchange rate is making Japan very uncomfortable, and now the G20 meeting in Seoul could potentially be the location of even further confrontation.
http://uk.reuters.com/article/idUKTRE69C0EI20101013?feedType=RSS&feedName=businessNews&utm_source=twitterfeed&utm_medium=twitter&utm_campaign=DTN+Financial:
The South Korean President Lee Myung-Bak has joined the conversation:
http://news.yahoo.com/s/afp/20101013/bs_afp/skoreag20summiteconomyforex?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=DTN+Financial+News:
On September 20, I posted the following, which explained why Korean companies are doing well these days in international markets.
http://seoulgyopoguide.blogspot.com/2010/09/koreas-reason-for-feasting-this-year.html
The problem with the JPY strength in the world is that Japanese companies' products are getting more expensive and less profitable in the international markets everyday. Any demand from China, the US, or Europe is more likely going for Korean, and other Asian-made products. The Bank of Korea (BOK) has, since the financial crisis began, has acted to keep the KRW weak relative to the USD because it has correctly determined that the global demand for products is fragile. Nevertheless, it will be very interesting to see if the BOK gives in to international pressure which is pushing for a stronger KRW.
It isn't likely that this rhetoric from Japan will cease until the JPY/KRW exchange rate declines.
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