The South Korean won traded at an over 18-month low against the U.S. dollar Tuesday, falling for a second consecutive day as growing expectations of an early rate hike in the U.S. and weak growth data from Japan boosted demand for the greenback, dealers said.

The local currency was quoted at 1,121.15 per dollar as of 1:30 p.m., down 9.05 won from the previous session's end, tracking a decline in the Japanese currency and other major peers. The yen fell to the lowest level in almost eight years.

South Korea's won usually tends to move in lockstep with the yen as the two countries directly compete in overseas markets over products ranging from autos to smartphones.

Beating the market median forecast, data by the Labor Department showed on Friday that the U.S. added 295,000 jobs in February. The data also showed that the unemployment rate fell to 5.5 percent during that month from 5.7 percent in January, the lowest since May 2008.

The data stoked expectations that the Fed would start raising borrowing costs in June, sooner than what market players have projected.

Also, data released on Monday showed that Japan's economic growth in the fourth quarter of last year was lower than what had been initially expected, putting downward pressure on the already weak yen.

"The yen-dollar rate will continue to rise on expectations about an additional stimulus in Japan and the much-awaited rate hike in the U.S.," said Kim Moon-il, an analyst at Eugene Investment and Futures Co.

The Bank of Korea, the country's central bank, is scheduled to hold its monthly monetary policy meeting Thursday where it is widely expected to hold its base rate at a record low of 2 percent.

The country's key stock index, the KOSPI, remained in negative terrain Tuesday afternoon, falling for a second consecutive day.

Meanwhile, the won-yen cross rate stood at 920.65 as of 1:30 p.m. (Yonhap)