South Korea's top central banker said Friday that the country is seen as overcoming the negative impacts of the yen's weakness on the local economy, but weak domestic demand still remains a concern.

"It seems that (Korea) has weathered well the impacts of the yen's slide (as the second-quarter growth data shows)," Bank of Korea (BOK) Gov. Kim Choong-soo said before holding a monthly meeting with heads of local banks.

The BOK said Thursday that the South Korean economy grew 1.1 percent on-quarter in the second quarter, the fastest expansion in over two years, on the back of fiscal spending and improved construction investment.

However, the governor said that the second-quarter growth was mainly driven by external factors although fiscal and monetary stimulus played a role in propping up the growth, indicating that domestic demand still remains weak.

Korea's consumer spending inched up 0.6 percent on-quarter last quarter after declining 0.4 percent in the first quarter, which analysts say that the growth momentum has yet to be sustainable.

Gov. Kim also said that as Korea has posted the current account surplus, it could undergo smaller swings in market interest rates, compared with other nations when the Federal Reserve's stimulus tapering speculation has pushed up bond yields. (Yonhap News)