IMF: AI boom, not rate gap, drives won strength vs yen
The IMF said the divergence between the South Korean won and the Japanese yen is likely driven more by the AI boom than by differences in the two countries' interest rates. It noted that the bond yield gap between Japan and South Korea has not widened significantly and that markets have already priced in rising policy rates in both countries, yet the won still gained 11% against the yen between July 1 and September 3. The IMF said this suggests the AI boom's effects on the current and capital accounts are the more likely explanation for the split in the two currencies' performance.
It offers an official reading that ties the AI investment cycle to major currency moves, suggesting the boom's macroeconomic spillovers may now reach beyond the tech sector.