Close Change USD/KRW 1,152.70 +4.10 JPY/KRW 15.0208 +0.0475 3-Year Treasurys 3.34% -1 bp 5-Year Treasurys 3.49% unchanged 10-Year Treasurys 3.79% -1 bp 20-Year Treasurys 3.99% -2 bps SEOUL (Dow Jones)--The South Korean won was lower against the U.S. dollar late Thursday as worries over the fiscal health of France and Spain damped sentiment despite a successful German debt auction overnight. Local importers contributed to the won's weakness as they actively bought dollars through the session. Traders said crude oil importers were among the buyers as rising crude prices and a growing demand for heating-oil in the country likely contributed to their dollar demand. Market participants said that while the greenback was firm, it lacked any real upward momentum. They said many investors were sidelined, awaiting the outcome of key events like the French bond auction due later in the global day and the U.S. non-farm payrolls data due Friday. The dollar moved in a narrow KRW1,147.70-KRW1,152.70 range Thursday. "Any bad news from the euro zone will probably hit the risk-sensitive won, but recent data have shown fairly positive global macroeconomic conditions, making it harder for traders to bet aggressively against the local currency," said a local bank trader. "Euro-zone problems will probably send the euro lower against the dollar in the longer term. Yet, I'm not sure if it will necessarily support a buy dollar-sell won strategy," he said. Another local bank trader said he expects the dollar to move sideways in the near term, hovering around the KRW1,150 level. Korean government bonds remained locked in rangebound trade due to mixed leads on external economic conditions. "Ongoing euro-zone debt jitters are generally supporting safe-haven bonds, but positive data showing improvement in the U.S. economy in recent months have led some investors to sell bonds as well," said Daishin Securities fixed-income analyst Hwang Soo-ho. On the domestic front, persistently-high inflation and weakening growth momentum are making it hard to predict policy rate changes from the central bank, he said. "The Bank of Korea is expected to keep its key rate unchanged (at 3.25%) at its January meeting." Hwang pegged the three-year yield to stay in a 3.30%-3.40% band until the monetary policy meeting on Jan. 13. -By Jieun Shin, Dow Jones Newswires; 822-3700-1905; jieun.shin@dowjones.com

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