SEOUL (REUTERS) - Confidence among South Korea's large, mostly export-reliant companies rose to a 10-month high on hopes for growth-supportive policies from the country's new administration as well as the United States, a big business lobby group said on Wednesday.
The Federation of Korean Industries (FKI) said in a statement that its business outlook index for March rose to a seasonally adjusted 96.1, the highest since May 2012 and up from 93.7 in February.
But the reading remained below 100, which means more firms that responded to the FKI survey expect business conditions to deteriorate in the coming month.
The index has remained below 100 since August 2011 as global economic conditions deteriorated, underscoring pessimism among big businesses.
Aside from fears about the effects of the US "sequestration" budget cuts set to begin in three days, responding firms cited the rapidly depreciating Japanese yen as a key risk. The won is up nearly 4 per cent against the Japanese counterpart so far this year after gaining 22.8 per cent against the currency last year.
Policymakers and various trade associations have warned that yen's decline against the local currency may start cutting into the South Korea's exports in the coming months.