Close Change USD/KRW 1,138.90 +8.20 JPY/KRW 14.8179 +0.1373 3-Year Treasurys 3.36% -1 bp 5-Year Treasurys 3.50% -1 bp 10-Year Treasurys 3.81% -1 bp 20-Year Treasurys 4.01% -1 bp SEOUL (Dow Jones)--The South Korean won was lower against the U.S. dollar late Friday as fears over euro-zone sovereign debt crisis grew with government bond yields spiking in Spain and France overnight. Better-than-expected weekly jobless claims in the U.S. provided some relief but the market's primary focus remained on the euro-zone debt contagion risks, traders said. The U.S. unit fell briefly to an intraday low of KRW1,131.50 due to selling from exporters but it stayed afloat through the session. The Korean won has shed 1.1% against the dollar this week. Market participants said growing debt woes in Europe and fears over a fresh recession in the region will likely continue to exert downward pressure on the local currency. "As long as bond yields in the euro zone stay high as in recent days, risk aversion will probably continue to weigh on the local currency. The dollar is expected to test the key KRW1,150 resistance in the near term," said Samsung Futures currency analyst Jeon Seung-ji. Korean government bonds were higher as investors favored safe haven assets, with the benchmark U.S. 10-year bond yields also falling below a psychologically important 2% Thursday. The ongoing debt crisis could provide some near-term support to local bonds, but if the problem worsens, foreign investors are likely to liquidate their local bond investments as well, said Lee Jung-joon, a fixed-income analyst at HMC Investment & Securities. "The weakening won is another concern because the trend makes local assets less attractive to foreign investors. Unless signals for a future policy rate cut emerge from the Bank of Korea, yields of local treasurys will likely rise steadily ahead," he said. Lee added that the three-year yield is expected to rise above 3.40% next week. December bond futures ended seven ticks higher at 104.54. Foreigners were net buyers of 5,092 contracts Friday. -By Jieun Shin, Dow Jones Newswires; 822-3700-1905; jieun.shin@dowjones.com

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