The won halted a three-day slide that pushed the South Korean currency to an eight-month low after investors judged its recent declines amid tensions with North Korea to be excessive. Government bonds fell.

The dollar’s 14-day relative strength index against the won rose above 70 for a third day, a threshold that signals the greenback may weaken, data compiled by Bloomberg show. The won weakened 4.1 percent in the past month after North Korea authorized its military to conduct a nuclear strike while restricting South Korean access to a jointly managed industrial zone. Overseas investors sold a net $3.5 billion of local stocks this year through Monday.

“There is a market sentiment that the drop in the won in recent weeks was probably too much,” said Lee Dae-ho, analyst at Hyundai Futures. “The North Korean factor has been priced in and investors have been feeling the burden from the level of the currency.”

The won was little changed at 1,139.33 per dollar at the close of trading in Seoul, according to data compiled by Bloomberg. The currency earlier touched 1,144.82, the weakest level since July 26, and climbed as high as 1,135.48. One-month implied volatility in the won, a measure of expected moves in the exchange rate used to price options, gained 31 basis points, or 0.31 percentage point, to 11.17 percent.

South Korea’s benchmark Kospi Index of shares fluctuated between gains and losses before closing 0.1 percent higher. The Bank of New York Mellon Korea ADR Index, which tracks American depositary receipts of South Korean companies in New York, lost 0.5 percent Monday to 170.93, the lowest close since Sept. 6. The yield on the 2.75 percent government notes due March 2018 rose two basis points to 2.58 percent, the highest since March 27, according to prices from Korea Exchange.

North Korea’s state-run Korean Asia-Pacific Peace Committee warned foreigners in South Korea to take safety precautions, according to the government-controlled Korean Central News Agency. The North said Monday it will suspend operations at the Kaesong joint industrial complex and South Korea warned the North may be ready to conduct a nuclear test or a missile launch as early as this week.

“Combined with new concern of global outlook, regional tensions particularly remain high in Korea,” Robert Rennie, chief currency strategist at Westpac Banking in Sydney, said. “A significant weakness in the won isn’t likely to end until North Korea tensions clear up. A lot of bad news has already been priced into Asian outlook.”

North Korea’s decision last week to restart production of weapons-grade plutonium is credit-negative for South Korea as it has increased “the chance of a serious military clash,” Moody’s Investors Service analysts David Erickson and Thomas Byrne wrote in a report.

The won also tracked moves in the Japanese yen, which erased a decline that sent it to the lowest level since May 2009 after Japanese Finance Minister Taro Aso said excessive currency gains are being corrected. The yen rose 0.4 percent after sliding 6.5 percent in the previous three days following the Bank of Japan’s unprecedented monetary easing.

A rapid weakening of the yen is expected to hurt the price competitiveness of South Korean exports, Bank of Korea said in a biannual report last week. The won strengthened 24 percent against the yen in the past six months.

“The won has been depreciating but the pace of depreciation is much faster with the yen,” South Korean Finance Minister Hyun Oh-seok said. “The impact from this has not been so bad for South Korean exporters yet, but they will see their competitiveness worsening over time.”

Bloomberg