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Global Macro: A Closeup on the Asian Pacific

NEW YORK ( TheStreet) -- The Bank of Korea, South Korea's central bank, cut its key interest rate last week in order to keep pace with a weaker yen. Although the Bank of Japan is adamant that they do not intend on inciting a currency war, other countries look to be suffering from Japan's policy.

The yen has depreciated against the won by about 10% since the beginning of the year, which is hurting South Korea's export market. The Bank of Korea even cited a weaker yen as a potential threat to the country's economic viability.

Below is a chart of MSCI South Korea Index Fund (EWY) over Total World Stock Index ETF (VT). This chart shows South Korean equity weakness since the beginning of the year. In this time period the MAXIS Nikkei 225 Index ETF (NKY) has taken off due to a strengthening trade balance. The two countries are fierce competitors in the export market, and this chart clearly shows a competitive advantage going in the way of Japan due to their favorable monetary policy.

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