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Asia, Forex

S.Korea stocks fall amid escalating trade conflict with Japan

* KOSPI index falls, foreigners net sellers * Korean won weakens versus U.S. dollar * South Korea benchmark bond yield rises Seoul, Aug 23 (Reuters) – Round-up of South Korean financial markets: ** South Korean shares fell on Friday after the country scrapped intelligence-sharing pact with Japan, adding to tensions between the two nations in the grip of a long-drawn trade dispute. The Korean won weakened, while the benchmark bond yield rose. ** As of 0213 GMT, the Seoul stock market’s main KOSPI fell 2.23 points, or 0.11%, to 1,948.78. **South Korea said on Thursday it will scrap an intelligence-sharing pact with Japan, drawing a swift protest from Tokyo and deepening a decades-old dispute over history that has hit trade and undercut security cooperation over North Korea. ** Japanese Minister of Defence Takeshi Iwaya said on Friday South Korea’s decision to end an intelligence-sharing pact between the East Asian neighbours was extremely regrettable. ** Japan’s excluding South Korea from the so-called White list will take effect on Aug. 28; investors may stay cautious until then, says KB Securities report ** Ending intelligence-sharing pact is more about security issue, so it will take some time until it actually impacts on corporate earnings, says Huh Jae-hwan, analyst at Eugene Investment Co. ** South Korea’s finance minister said on Friday the government would propose to increase spending by 9.2% in next year’s budget to shield Asia’s fourth-largest economy from growing risks. ** Foreigners were net sellers of 9.2 billion won worth of shares on the main board. ** The won was quoted at 1,213.8 per dollar on the onshore settlement platform , 0.53% lower than its previous close at 1,207.4. ** In offshore trading, the won was quoted at 1,214.4 per U.S. dollar, down 0.4% from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,213.4 per dollar. ** MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.09%, after U.S. stocks mixed . Japanese stocks rose 0.26%. ** The KOSPI has fallen 4.52% so far this year, and lost 5.2% in the previous 30 trading sessions. ** The current price-to-earnings ratio is 12.10, the dividend yield is 1.28% and the market capitalisation is 1,242.04 trillion won. ** The trading volume during the session in the KOSPI index was 196.42 million shares, and of the total 889 traded issues, 248 shares advanced. ** The won has lost 8.1% against the U.S dollar so far this year. ** In money and debt markets, September futures on three-year treasury bonds fell 0.12 points to 111.20 ** The most liquid 3-year Korean treasury bond yield rose by 3.1 basis points to 1.161%, while the benchmark 10-year yield rose by 4.1 basis points to 1.270%. (Reporting by Yuna Park; Editing by Rashmi Aich)

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