The South Korean won weakened to around 1,443 per dollar, extending losses from the previous session as sustained capital outflows pressured market sentiment. Investors are now closely watching the National Pension Service (NPS), with the large state-run fund widely expected to reassess its foreign exchange hedging practices and overseas investment strategy.
The currency had a turbulent 2025, at one point briefly depreciating beyond 1,480 per dollar, as the NPS’s unhedged foreign exposure intensified the impact of capital outflows on the exchange rate. Some investor concerns were alleviated after a task force in charge of the NPS’s strategic review said it is examining existing policies and may introduce new measures, including formal guidelines on foreign exchange hedging.
Earlier this year, the NPS management committee also approved a gradual rebalancing toward domestic assets, raising its allocation to local equities to 14.9% and to domestic bonds to 24.9%. The shift toward onshore investments has helped ease downward pressure on the won.
