Kospi and won decline as US sends aircraft carriers to waters off Korea

The South Korean benchmark stock index, KOSPI is down for a fifth consecutive day and suffered the biggest daily decline in more than a month as the United States sends it warship near the Korean Peninsula in response to threats from North Korea. KOSPI is currently trading at 2133, down 0.9 percent for the day.  While US military ships frequently travel those waters but this time it is being taken differently due to,

• US missile strikes in Syria, in response to an alleged chemical weapons attack by the Assad regime.
• Due to President Trump’s comment that US would handle the North Korea’s threats from reckless missile tests in the region unilaterally even if the US fails to garner support from China, the most important ally of North Korea.
• There are rumors that the United States is considering bombardment of North Korea’s nuclear facilities.

Attacks on Syria and North Korea won’t be the same at all. North Korea is a Nuclear weapon powered state and if attacked it is likely to use all its weapon arsenal not only on the US but on neighboring enemies like the South Korea and Japan.  

The South Korean won has suffered a similar fate that of KOSPI. It is down for a fifth consecutive day. It is currently trading 1142 per USD, down 0.7 percent for the day. Since 4th, it is down close to 2.5 percent.