Impact of Japan Earthquake on South Korean Economy

The destructive earthquake and towering tsunami that hit Japan is expected to have an impact on the South Korean economy and its businesses, local experts said Friday.

Government officials, financial analysts and business executives said that the record 8.8 magnitude quake and subsequent tsunami that devastated parts of Japan could exert negative impact on the global economy that is making a comeback from the 2008 financial crisis.

“At present, because the extent of the damage cannot be gauged, the fallouts cannot be determined but they are expected to exert influence across the board in areas like global trade, foreign exchange markets, stock markets and businesses,” a government source said.

The source, who declined to be identified, said that while the incident took place after the close of the local market, it could raise market uncertainties. Seoul is keeping close track on the non-deliverable forward market, according to the source.

The finance and knowledge economy ministries have convened emergency meetings of senior officials to follow up on damages and determine fallouts in trade, growth and the industrial sector, with the Bank of Korea also setting up an emergency task force to monitor events in Japan.

“Close attention will be paid on effects on industrial parts that South Korean companies buy from Japan, and overall effects on international crude oil and grain prices,” the finance ministry official said.

Market analysts said that while the exchange rate of the Korean won rose to 1,130 won to the dollar it has since settled down to around the 1,126-1,127 won range.

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