The South Korean currency continued to strengthen on Tuesday, surpassing the psychologically important level of 1,000 won per 100 yen. The won hit 998.25 per 100 yen as of 5:34 p.m., up 4.92 won  from the previous close. 

The won had previously rose to a yearly high of 995.63 per yen on Jan. 2. The Tuesday gain comes as the bullish global stock market is rekindling investor appetite for risky assets.

"The won has been strengthening against the U.S. dollar as investors are again turning to risky assets. This also affected the won-yen cross rate," said Hong Seok-chan, an analyst at Daishin Economic Research Institute.     

Hong, however, projected the won's ascent against the Japanese currency to move in a narrow range for the time being amid government signals to take action.    

Earlier in the day, Vice Finance Minister Choo Kyung-ho told reporters that "foreign currency authorities remain worried about one-sided movement in the won-dollar exchange rates," expressing concerns over herd behavior in the market.

The finance ministry also sent out a message to reporters last week saying that it will take "stern" action against speculative forces in the financial market.

The local currency closed at 1,022.1 won against the U.S. dollar on Tuesday, up 2.3 won from the previous session's close. (Yonhap)