Markets: Korean Investors' U.S. Stock Mania Undermines FX Stability Efforts - KRW 1,451.8 per USD

[Para 1: The Lead] Korean investors' insatiable appetite for U.S. stocks, labeled as "ants," is complicating South Korea's efforts to stabilize its won, currently trading at 1,451.8 per USD, a 0.9% decline this year. This retail investors' preference for foreign equities, despite domestic market gains, is exposing the limitations of Seoul's policy tools in managing the currency's volatility. [Para 2-3: Supporting details & Context] As of January 29, Korean retail investors held a record $171 billion in overseas stocks, surpassing $170 billion for the first time in three months. This trend, coupled with $5.0 billion in net U.S. stock purchases by domestic investors last month, more than double December's $1.9 billion, is pressuring the won. To address this, authorities have implemented measures, including tax exemptions on overseas stock sales and reinvestment in domestic stocks, and encouraged exporters to convert more foreign earnings into won. However, these efforts have not stemmed the won's weakening trend. The Bank of Korea Governor, Rhee Chang-yong, acknowledged that while recent measures were not ineffective, they revealed policy weaknesses. Analysts suggest that without significant changes, particularly in the National Pension Service's foreign exchange strategies, the won may continue to face downward pressure.