The won stood at 1,498 per dollar as of 3:30 p.m., moving into the 1,400 range for the first time since May 29.
The move marked a sharp reversal in just three days of trading since South Korea launched 24-hour onshore dollar-won spot trading on Monday. Compared with the mid-1,500 level seen on the first day of the new trading system, the exchange rate was down by nearly 40 won as of Wednesday afternoon.
Foreign exchange dealers said dollar-selling linked to SK hynix's ADR offering emerged in the dollar-won forwards market, adding to expectations of fresh dollar supply.
SK hynix recently launched a U.S. share sale to raise about 43 trillion won or $28.7 billion, drawing strong investor interest as global demand for artificial intelligence (AI)--related chips continued to support appetite for the chipmaker's shares.
The company is expected to bring more dollars into the country in the coming week and convert part of the proceeds into won, creating expectations of additional dollar supply in the domestic foreign exchange market.
The move comes after the won had remained under pressure near crisis-era levels despite strong exports and gains in South Korean equities. Market participants have pointed to foreign equity outflows, South Korea's interest-rate gap with the U.S. and rising domestic demand for dollar assets as factors weighing on the currency.
A senior finance ministry official said supply-demand conditions in the dollar-won market could shift in the second half, citing won demand from SK hynix's planned U.S. share sale.
Bond yields moved in opposite directions, indicating that the currency rally did not translate into a broad-based bid for government debt.
The three-year government bond yield edged down 0.5 basis point to 3.775 percent, while the 10-year yield rose 3.2 basis points to 4.245 percent.
The short end was little changed as the sharp recovery in the won eased some near-term concerns over imported inflation and currency-driven policy pressure. Longer maturities came under pressure amid curve-steepening flows and broader market volatility.
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