S.Korean shares inch down on weaker yen

South Korean shares ended slightly lower Wednesday as the Japanese yen's continued fall to the local currency fueled worries about price competitiveness of local export companies.

The benchmark Korea Composite Stock Price Index (KOSPI) edged down 0.38 points, or 0.02 percent, to close at 2,051.20. Trading volume stood at 333.23 million shares worth 4.63 trillion won (4. 54 billion U.S. dollars).

Exporters lost ground after the won/yen exchange rate declined as low as 966.34 won per 100 yen earlier in the day, the lowest since August 2008.

Amid the strong dollar trend on expectations for U.S. Federal Reserve's earlier-than-expected rate hike, the yen depreciated to the greenback due to the expected additional monetary stimulus amid weak growth.

Investors tried to wait and see whether further monetary stimulus measures will come out at the upcoming Bank of Japan (BOJ) 's policy meeting slated for Thursday.

The South Korean won depreciated at a relatively small extent, despite the central bank's rate cut last month, due to more-than- expected current account surplus.

The South Korean currency finished at 1,020.0 won against the greenback, down 1.7 won from Tuesday's close.

Foreigners kept a buying trend for seven days by raising stock holdings by 105.8 billion won, but local institutions dumped shares worth 199.2 billion won, the fifth straight session of selling. Retail investors purchased a net 125 billion won worth of stocks.

Samsung Electronics, which depends heavily on exports for sales, slid 0.4 percent to settle at 1,189,000 won, the lowest in two years. Top automaker Hyundai Motor declined 1.6 percent, and its affiliate Kia Motors retreated 2.5 percent. Memory chip giant SK Hynix tumbled 5.1 percent, but the biggest steelmaker POSCO added 0.9 percent.

The weak yen trend boosted worries about price competitiveness of local exporters, which are fiercely competing with Japanese manufacturers in the global market. Japanese stocks maintained an upward trend for three days in a row.

Bond prices ended lower. Yield on the liquid three-year treasury notes increased 0.022 percentage point to 2.534 percent, and the return on the benchmark 10-year government bonds climbed 0. 038 percentage point to 3.101 percent.