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Business confidence in S. Korea shows mixed picture amid strong won


13:41, January 29, 2013

SEOUL, Jan. 29 (Xinhua) -- Business confidence in South Korea showed mixed picture as companies saw future economic conditions from a different perspective by size.

The February reading of business survey index (BSI) for big corporations fell to 73 from 74 a month earlier, Bank of Korea ( BOK) said in a statement on Tuesday. The BSI gauges manufacturers' outlook on business conditions for the upcoming month.

The fall came amid the won's ascent against the U.S. dollar and the Japanese yen, which was feared to dent the profitability of export-dependent large manufacturers. The won rallied 7.6 percent versus the greenback in 2012, while surging 19.6 percent to the yen.

The reading for small- and mid-sized enterprises (SMEs) rose to 70 for February from 66 in the prior month, indicating that smaller firms driven mainly by domestic demand may benefit from improved purchasing power of consumers amid the stronger won.

The different business outlook by company size was confirmed in another poll. According to the survey of the country's 600 largest corporations by sales taken by the Federation of Korean Industries (FKI), business survey index for February came in at 86.7, staying below the benchmark 100 for nine straight months.

The business lobby group said the eurozone economy was worsening each passing day amid fiscal consolidation in the region, noting that domestic exporters were facing the aggravating profitability and price competitiveness amid the weaker yen.

Bank of Japan planned to make Federal Reserve-type asset purchases a year later, raising its inflation target by 1 percentage point to 2 percent. The South Korean won appreciated above the 1,200 won per 100 yen for the first time in 32 months amid the credit easing.


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