SEOUL (Reuters) - South Korea's central bank said it will work towards preventing herd behaviour in financial markets with regards to the yen-won exchange rate, and watch market movements very closely following an emergency meeting on Monday.

The meeting was held in response to the Bank of Japan's decision to expand its massive stimulus spending last week, which weakened its currency further against the won.

The Bank of Korea also said it would keep a close eye on the effects of a weakening yen on local exports, the real economy and financial market stability.