Seoul stocks up 0.51% on BOJ's freeze of key rate

South Korean stocks ended higher Wednesday on the Japanese central bank's decision to freeze its key rate. The local currency rose against the US dollar.

The benchmark Korea Composite Stock Price Index climbed 10.28 points, or 0.51 percent, to 2,035.99.

The Bank of Japan kept its key rate unchanged at minus 0.1 percent.

"The BOJ's decision pushed up the benchmark index as investors were relieved from the bank's decision to keep its key rate unchanged," said Kim Ye-eun, an analyst at LIG Investment & Securities.

If the BOJ cuts the policy rate, South Korean exporters have less room in terms of prices overseas compared with their Japanese rivals. A stronger won results in a decrease in the exporters' overseas earnings when converted into the dollar.

Lee Kyung-min, an analyst at Daishin Securities, also said the BOJ's decision had a positive influence on the local bourse. Still, he said the market could be volatile in case the US raises its key rate this week.

The results of the US Federal Open Market Committee meeting are set to be released in the wee hours of Thursday in Seoul.

Large-cap stocks were mixed across the board.

Market bellwether Samsung Electronics gained 0.44 percent to 1,592,000 won and the state-run Korea Electric Power Corp. was up 1.54 percent to 59,500 won.

Meanwhile, top automaker Hyundai Motor was down 0.36 percent to 138,000 won, and leading cosmetics maker AmorePacific Corp. lost 1.03 percent to 386,000 won.

The local currency was trading at 1,120.10 won against the US dollar, up 0.50 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys fell 0.9 basis point to 1.327 percent and the return on the benchmark five-year government bond lost 0.6 basis point at 1.386 percent. (Yonhap)