South Korean won pars losses after martial law lifting proposal passed

South Korea won pared losses against the U.S. dollar after President Yoon Suk-yeol said he would lift the country's first martial law order in more than four decades.

The won last traded 0.09 percent lower at 1,416.31 against the greenback after depreciating to 1,444.93 on Tuesday — its weakest level since October 2022, according to LSEG data.

Yoon's message to put an end to martial law came after parliament quickly rejected his declaration. The country's currency hit a new two-year low vs US dollar after Yun's initial decision that the country would go under martial law, which refers to the temporary imposition of military authority over a civilian population and is usually observed during a state of emergency.

Yun accused opposition lawmakers of controlling parliament and plunging the country into political crisis. The move, which has not been imposed in Asia's fourth-largest economy since 1980, was sharply criticized by opposition lawmakers.

Yun's conservative People Power Party is deadlocked in talks with the liberal opposition Democratic Party over the 2025 budget bill.

The 63-year-old took office in May 2022. shortly after winning the presidential election by the narrowest margin in the country's history. His foreign policy has been dominated by a tough stance on North Korea, while Yun has also sought to strengthen ties with the US and Japan.

Exchange Traded Funds and U.S.-listed shares of Korean firms fell on Tuesday before starting a recovery after the country's parliament voted to lift martial law.

South Korea's Kospi index fell 1.8 percent on Wednesday, while the Kosdaq was down 2 percent, with several major stocks in decline.

Shares of chip maker Samsung Electronics fell nearly 1 percent, while battery maker LG Energy Solution and car maker Hyundai Motor fell by 2.8% and 2.4% respectively.