South Korean stocks are likely to move upwards this week on the back of eased uncertainties after the U.S. Federal Reserve’s announcement to trim its stimulus early next year, but gains will be capped by renewed fears of a falling yen, analysts said.

The benchmark Korea Composite Stock Price Index closed at 1,983.35 on Friday, up 0.78 percent from a week earlier.

The main index had been haunted by jitters surrounding U.S. monetary policy ahead of the Federal Open Market Committee meeting that ended Thursday (Seoul time), moving in a tight range of around 1,970.

The Seoul bourse got a boost from the Fed’s January tapering plan but failed to extend the bullish run as a stronger dollar put downward pressure on the Japanese currency, posing a risk to the local economy.

Analysts predict investors will move on from fears over the yen this week and opt to increase risky bets since the tapering has subdued prolonged market uncertainties.

“The Fed showed that it tried its best to minimize negative repercussions by keeping the (stimulus) cut on ‘a moderate scale,’ which ensures investors there’ll be ample liquidity in the market,” said Han Chi-hwan, an analyst at KDB Daewoo Securities Co.

But he noted that the gains may be limited by the yen’s weakness, exerting downward pressure on shares of automakers, the industry most affected by won-yen volatility.

Han forecast the KOSPI to move in a range of between 1,960 and 2,020.

Foreigners were net buyers of local equities last week, although the amount was small at a combined net 15 billion won.

Institutions snapped up a net 81 billion won, while retail investors offloaded a net 88 billion won.

Machineries and banks were among the biggest gainers, each climbing 1.5 percent and 1.3 percent. Tech and textile firms were the most bearish, losing about 0.1 percent each. (Yonhap News)