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Report: So. Korea not affected by weak yen

Published By United Press International
SEOUL, Feb. 18 (UPI) -- South Korean tech firms, aided by growing brand value and other factors, will remain largely unaffected by a lower Japanese yen, says a J.P. Morgan report.

The report cited South Korean companies' lack of participation in overlapping businesses with Japanese tech firms and diversified currency exposure to support its conclusion, the Yonhap News Agency reported Monday.

The investment bank said the South Korean won has faced negative correlation with both the yen and the U.S. dollar but the recent depreciation in the yen has not driven down tech stocks, even as stock prices of rival Japanese consumer electronic firms rise based on market perception that a lower yen would increase their exports.

South Korean tech giants Samsung Electronics Co. and LG Electronics Inc. seem more susceptible to fluctuations in the euro due to higher exposure to European handset and TV markets, the report said.

"Although the Japanese yen weakness clearly benefits Japanese consumer electronics companies, such as Panasonic Corp., Sony Corp. and Sharp Corp., overall currency movement becomes less relevant to tech companies given diversified currency exposures beyond major currencies," J.P Morgan analyst J.J. Park was quoted as saying.

The yen is trading close to the mid 90s against the U.S. dollar, the lowest level in nearly three years, and is expected to depreciate further. The won also has been appreciating against the yen, raising concerns of South Korean exporters.
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Race winner Bradley Wiggins of Great Britain (C) stands between second place finisher Christopher Froome of Great Britain (L) and third place finisher Vincenzo Nibali of Italy on the presentation podium following the final stage of the Tour de France in Paris on July 22, 2012. Wiggins of Great Britain became that country's first ever overall winner of the Tour de France. UPI/David Silpa