North Korea’s leader Kim Jong Un before a meeting with US President Donald Trump on the south side of the Military Demarcation Line that divides North and South Korea, in the Joint Security Area (JSA) of Panmunjom in the Demilitarized zone (DMZ) on June 30, 2019.
BRENDAN SMIALOWSKI | AFP | Getty Images
The Korean won weakened sharply on Tuesday against the dollar on unconfirmed reports that North Korean leader Kim Jong Un is seriously ill.
The Korean won last fell 1.08% to trade at 1,233.83 per dollar.
The South Korean markets also saw sizable declines, with the Kospi down 1.94% while the Kosdaq index fell 2.25%. Shares of defense firm Victek skyrocketed 24.71% while North Korea exposed stocks Hanil Hyundai Cement and Hyundai Elevator dropped 2.17% and 4.7%, respectively.
The moves came after CNN reported Tuesday, citing an unnamed U.S. official with direct knowledge, that Washington is “monitoring intelligence” that Kim is in “grave danger after a surgery.”
The North Korean leader was reportedly absent during a celebration of his grandfather’s birthday on April 15, raising questions over his health. CNN reported that he had been seen four days to prior to that, at a government meeting.
Still, confusion remained over the state of Kim’s health.
South Korea has “nothing to confirm” and “we detect nothing special going on inside North Korea,” a spokesman for the president’s office said in a statement.
Reuters also reported, citing two government sources, that Kim was not gravely ill.
An earlier report from Reuters also cited a South Korean media website, Daily NK, as saying that Kim was receiving treatment after undergoing a cardiovascular procedure on April 12. That report cited unidentified sources inside the regime.
The uncertainty of the situation and “what a potentially new regime might look like” is weighing on markets, Bank of America’ Securities’ Adarsh Sinha told CNBC’s “Street Signs” on Tuesday.
“The first thing the (foreign exchange) market does is price in higher risk premium, which means a weaker currency, or a weaker Korean won,” said Sinha, who is co-head of Asia rates and foreign exchange strategy at Bank of America Securities.
Many other currencies in Asia also weakened, he added. The onshore Chinese yuan slipped 0.2% to 7.0859 per dollar while its onshore counterpart traded at 7.0989 per dollar. The Singapore dollar also declined 0.37% to 1.4262 against the greenback.
“For the (foreign exchange) market, it’s sort of act first and think about the details later,” Sinha said.
This is developing news. Please check back for updates.’
