Heavy foreign selling in local equities continued to weigh on the won and debt markets, while traders saw no clear signs of actual intervention by foreign exchange authorities.
In the Seoul foreign exchange market, the exchange rate closed at 1,539.1, down 9.4 from the previous session's overnight close.
It was the first time the exchange rate ended regular trading above the 1,540 threshold in 17 years - since the aftermath of the global financial crisis in March 2009.
During intraday trading, the rate rose as high as 1,547, marking a sharp increase from Thursday's daytime close of 1,529.7.
Overnight on Wall Street, Broadcom's post-earnings plunge weighed on sentiment toward artificial intelligence and semiconductor stocks, adding pressure to tech and AI heavyweights that had led the recent rally in Seoul.
Foreign investors net sold more than 3.5 trillion won ($2.27 billion) worth of KOSPI shares on Friday, after unloading a net 16.5 trillion won over three trading sessions from Monday to Thursday despite a one-day market closure for local elections.
The foreign selling streak, which began last month, extended to a 20th consecutive session, the longest stretch of net selling since March-April 2020.
Despite limited moves in the U.S. Dollar Index and the dollar-yen exchange rate, the won fell more sharply than major emerging market currencies, underscoring Korea-specific pressure tied to foreign selling in local stocks.
The won's underperformance was also clear against regional peers on June 5, with the Singapore dollar, Hong Kong dollar and Vietnamese dong largely flat against the dollar and the Indonesian rupiah down about 0.2 percent, while the won fell nearly 1 percent from the previous session's regular market close.
Equity outflows also offset strong exports and a solid current account surplus, adding upward pressure on the exchange rate.
The Bank of Korea said Friday that the April current account surplus reached $28.29 billion, the second-largest on record after the previous month's all-time high, but the large goods surplus was overshadowed by currency conversion and hedging demand linked to foreign stock selling.
This followed a sharp sell-off on Thursday, when the three-year yield jumped 8.5 basis points to 3.858 percent and the 10-year yield climbed 9.4 basis points to 4.229 percent.
The continued bond weakness reflects concerns that the weaker won, rising international crude prices, Middle East tensions and additional U.S. tariff pressure could add to import-price inflation and prompt further tightening by the BOK.
Policymakers have stepped up verbal intervention for two consecutive days. Koo Yun-cheol, Deputy Prime Minister and Minister of Economy and Finance, said on Friday that authorities are "responding with extraordinary vigilance to the widening volatility in financial and foreign exchange markets, as well as the challenges facing consumer prices."
"No clear indications of smoothing operations to cap the upper limit of the exchange rate have been observed so far," an FX trader said on the condition of anonymity.
With the exchange rate nearing the 1,550 won threshold, market participants are watching the tone of further official messages and whether authorities will take concrete market-stabilization steps.
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