South Korean Won Weakens on Kim Jong-un ‘Grave Danger’ Reports

The South Korean won has been weakening against multiple currency rivals since it was first reported that North Korean Supreme Leader Kim Jong-un’s health is in â€œgrave danger.” The won has slightly recovered, but investors appear to be waiting for confirmation that the dictator is in good shape. Since rising to power, Kim has been engaging with South Korea, and analysts fear that relations would deteriorate if something were to happen to him.

On Monday night, CNN published a report that claimed Kim’s health was in â€œgrave danger” and that intelligence officials were monitoring the developments, citing two unnamed officials with direct knowledge of the situation. One source called the concerned credible, but it would be hard to assess the severity due to the restrictions on information in the reclusive nation.
Speculation about Kim’s health has been rampant since he missed the nation’s most important holiday – The Day of the Sun – on April 15. The annual event celebrates his grandfather’s, Kim Il-Sung, birthday. The yearly festivities include satellite launches and military parades. There were additional rumblings since he had been seen less than a week earlier at a Workers’ Party politburo meeting.
A South Korea-based internet newspaper that covers North Korean news, Daily NK, added fuel to the fire when it reported that Kim had a cardiovascular system procedure on April 12. He needed the treatment due to his “excessive smoking, obesity, and overwork.” After the surgery, Kim was sent to a villa in Hyangsan County and taken care of by the medical staff, most of whom were sent back to Pyongyang on Sunday.
Within hours, a South Korean government source told a state-funded news outlet, Yonhap News Agency, that Seoul had not come across any unusual signs about his health.
So, what is happening? It is unclear right now, but Asian financial markets reacted negatively to the reports.
South Korea’s Kospi index plunged 1.5% following the breaking news, but it has since pared those losses and ended the day down 1%. The Kosdaq index declined more than 3%, but it also cut more than half of those losses, finishing the session down 1.4%. Victek, an aerospace defense firm, witnessed a 30% spike in its shares. North Korea-exposed stocks, such as Hanil Hyundai Cement and Hyundai Elevator, also fell on the breaking news. Other Asian indexes, such as the Nikkei and the Shanghai Composite, fell at least 1%.
The USD/KRW currency pair rose 1.01% to 1,232.95, from an opening of 1,220.71. The EUR/KRW advanced 0.8% to 1,336.39, from an opening of 1,326.02.

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Original from: www.earnforex.com