Aju Press - Asia News Hub

Journalist

Kim Yeon-jae김연재

ReporterBank of Korea & Market, Macroeconomics

Kim Yeon-jae is a journalist at AJU Press (AJP's English platform),
covering macroeconomics, international finance, and geopolitics.
He closely tracks central bank monetary policies, global energy supply chains,
and the Korean defense industry. "Peering into the risks behind the euphoria."

Latest by Kim Yeon-jae

Korea inflation hits 30-mo high June, pace slows on weak demand SEOUL, July 02 (AJP) - South Korea's consumer inflation accelerated to a 30-month high in June as soaring petroleum prices accounted for nearly one percentage point of the headline increase, keeping pressure on policymakers while demand remains weak. The consumer price index stood at 119.99 in June, up 3.2 percent from a year earlier, the Ministry of Data and Statistics said Thursday. The rate accelerated from 3.1 percent in May and remained above 3 percent for a second straight month. It was the fastest increase since December 2023, when consumer prices also rose 3.2 percent. From a month earlier, however, the index rose just 0.1 percent, slowing sharply from 0.5 percent increases in both April and May, suggesting the recent inflation surge may be losing momentum on slack demand. Petroleum prices jumped 24.7 percent from a year earlier, the steepest increase since July 2022. Gasoline prices rose 23.1 percent, diesel 33.7 percent and kerosene 23.1 percent. Petroleum products alone added 0.93 percentage point to the headline inflation rate, underscoring the outsized impact of higher fuel costs on June inflation. Industrial goods prices climbed 4.4 percent from a year earlier, contributing 1.47 percentage points to overall inflation. Agricultural, livestock and fishery product prices rose 3.2 percent, widening from 2.2 percent in May. By spending category, transportation prices jumped 11.1 percent from a year earlier, contributing 1.11 percentage points to overall inflation, the largest increase among major expenditure categories. The living necessities index, which tracks frequently purchased goods, rose 3.4 percent, up from 3.3 percent in May and the highest level since April 2024. Core inflation, which excludes food and energy, held steady at 2.5 percent, while another core measure excluding agricultural products and petroleum eased to 2.4 percent from 2.5 percent in May. Services prices rose 2.6 percent from a year earlier, slowing from 2.8 percent in May. Personal services increased 3.4 percent, while dining-out prices rose 2.6 percent. The moderation in service-sector inflation suggested sluggish domestic demand continued to offset part of the imported inflationary pressure from higher energy costs. According to disclosures by South Korea's five largest commercial banks, non-performing loans to the service sector rose to 1.22 trillion won in the first quarter, surpassing manufacturing and real estate for the first time. The deterioration reflects mounting financial strain on consumer-facing businesses such as private academies, publishers, video production firms, auto repair shops, medical clinics and nursing homes, where softer household spending has eroded sales and debt-servicing capacity. Deputy Governor Lee Ji-ho said June inflation edged higher because petroleum prices remained elevated and agricultural product prices accelerated, even as travel-related service prices cooled from May. The combination suggests inflation is being driven primarily by supply-side energy costs rather than broad-based domestic demand. The central bank said inflation is expected to ease somewhat in July as global oil prices decline and government price-stabilization measures take effect. However, it warned that consumer inflation is likely to remain elevated for some time as the impact of the Gulf crisis continues to filter through energy prices with a time lag. The BOK also said core inflation is expected to remain elevated as higher production costs gradually pass through to consumers, adding that it would continue to monitor price developments closely. Separately, the government is preparing measures aimed at keeping annual inflation below 3 percent in the second half. It plans to present an inflation forecast of 2.7 percent to 2.9 percent in its second-half economic policy package, signaling its determination to prevent annual inflation from exceeding 3 percent despite seasonal price volatility. First Vice Minister of Economy and Finance Lee Hyoung-il said at a vice-ministerial price meeting that June inflation would have reached an estimated 3.6 percent without the temporary ceiling on petroleum prices. He said the measure lowered headline inflation by 0.4 percentage point and called on ministries to swiftly implement additional measures to stabilize prices of daily necessities. The government plans to focus on petroleum products, agricultural, livestock and fishery goods, and public utility charges to contain inflationary pressure in the second half. As of 11:10 a.m., Korea’s government bond market showed a relatively muted reaction. The three-year government bond yield fell 3.5 basis points to 3.752 percent, while the 10-year yield was little changed at 4.482 percent, moving by only 0.7 basis point. Equities were under heavier pressure. The KOSPI was trading down 2.2 percent at around 8,125 after a sell-sidecar was triggered in morning trading, as renewed concerns over a possible peak in the semiconductor cycle spread following Meta-related cloud investment news. 2026-07-02 11:18:31
Korea's annual inflation above 3% in June but slows amid sluggish demand SEOUL, July 02 (AJP) - South Korea's consumer inflation remained above 3 percent for a second straight month in June, driven by elevated energy costs stemming from the prolonged Gulf crisis, although monthly price growth slowed, suggesting inflation may have peaked as global oil prices eased and domestic demand remained weak. The composite consumer price index (CPI) stood at 119.99 in June, up 3.2 percent from a year earlier and 0.1 percent from the previous month, the Ministry of Data and Statistics said Thursday. Core inflation, which excludes food and energy, held steady at 2.5 percent, while another core measure excluding agricultural products and petroleum products rose 2.4 percent. The living necessities index increased 3.4 percent from a year earlier, outpacing headline inflation. Industrial goods prices climbed 4.4 percent, led by a 24.7 percent surge in petroleum products. Services inflation eased to 2.6 percent from 2.8 percent in May, reflecting sluggish domestic demand. 2026-07-02 08:19:45
NPS chief denies "bombshell" selling at KOSPI for rebalancing SEOUL, July 01 (AJP) - The head of South Korea’s National Pension Service pushed back Wednesday against speculation that the fund could trigger a massive selloff in domestic shares, saying fears of a so-called 74 trillion won “selling bomb” were exaggerated. Kim Sung-joo, chairman of the National Pension Service, said in a Facebook post that the 74 trillion won figure was “wrong” and “absurd.” “Even if the National Pension Service begins rebalancing, the chance of it becoming a ‘bomb’ is zero,” Kim wrote. “Rebalancing by the National Pension Service is nothing new.” The comments came as investors watched whether the pension fund would resume selling Korean shares after a temporary waiver on domestic equity rebalancing expired at the end of June. The issue has become a focus for the market after a sharp rally in Korean stocks lifted the value of the fund’s domestic equity holdings, raising speculation that the NPS may need to reduce exposure to bring its portfolio closer to target levels. Some market estimates had suggested the fund could sell tens of trillions of won worth of domestic shares, turning pension fund flows into one of the biggest variables for Korean equities in the second half of the year. The rebalancing in question follows a January decision by the National Pension Fund Management Committee to temporarily delay domestic equity rebalancing, citing high market volatility. In May, the committee raised this year’s target allocation for domestic stocks to 20.8 percent from 14.9 percent. It also adjusted related rules to reduce market impact, including by widening the strategic asset allocation band and lowering the maximum daily rebalancing amount. Kim said the May changes were designed to ensure that rebalancing would be carried out gradually over an extended period, rather than through a large short-term sale. Closing market data also showed little sign of an institution-led selling wave on the first day after the waiver expired. On the KOSPI, institutional investors as a group sold a net 70.5 billion won, far smaller than the 1.7029 trillion won sold by foreign investors. Retail investors bought a net 1.7397 trillion won. The investor data, however, cover institutions as a whole and do not separately identify trading by the NPS. Kim described rebalancing as a process of adjustment, not abrupt liquidation. He said a portfolio that tilts too far in one direction must be brought back into balance carefully and gradually. The NPS does not decide whether to rebalance based simply on the level of the KOSPI, Kim said. The fund also considers returns on other assets, including bonds and alternatives, as well as stock volatility, interest rates and exchange rates. He said the fund could not disclose the details of its rebalancing strategy because doing so could allow market participants to take advantage of its trading plans. Kim also stressed that the NPS is not an institution that sells immediately when stocks rise or buys immediately when they fall. “The mission of the National Pension Service is to work for the benefit and retirement security of the people as a universal owner that grows together with Korea’s economy, industries and companies,” he said. He urged the public not to be swayed by what he called fearmongering over a “selling bomb” or by reports that amplify market anxiety for clicks. 2026-07-01 16:06:18
World Cup 26: France, Mexico cruise into last 16; Norway to face Brazil SEOUL, July 01 (AJP) - France and Mexico powered into the last 16 of the 2026 FIFA World Cup with commanding wins, while Erling Haaland struck late to send Norway past Ivory Coast and into a showdown with Brazil. Norway beat Ivory Coast 2-1 at Dallas Stadium in Arlington, Texas, on Tuesday, in a match that kicked off at noon local time. Norway restored several first-choice players, including Haaland, who had missed the final group-stage match against France, but Ivory Coast controlled much of the early play. Ivory Coast pressed high from the start and used width to push Norway back. Norway struggled to build attacks, while Haaland saw little of the ball in the opening stages. But Norway struck first. In the 39th minute, Antonio Nusa punished Ivory Coast for dropping too deep, curling a shot into the net to give Norway the lead. Ivory Coast raised the pressure again after halftime. In the 75th minute, Amad Diallo equalized with a powerful strike after driving through the Norwegian defense. The match appeared to be heading toward extra time before Haaland delivered the decisive moment. In the 86th minute, he got a foot to a cross from the right and turned it in for the winner. Norway preserved the lead in stoppage time, with goalkeeper Orjan Nyland saving Diallo's free kick. The win gave Norway its first World Cup knockout-stage victory and sent it into the round of 16 against Brazil at New York New Jersey Stadium on July 5. France produced the most complete performance of the day, beating Sweden 3-0 at New York New Jersey Stadium in East Rutherford, New Jersey. The match kicked off at 5 p.m. local time. France played like one of the tournament favorites. Sweden tried to threaten on the counter early, but France gradually took control through possession, pressure and attacks from wide areas. The opening goal came in the 45th minute. Kylian Mbappe received a pass from Ousmane Dembele on the right side of the penalty area and curled a shot past the Swedish defense. France doubled the lead in the 53rd minute. Aurelien Tchouameni won the ball and found Michael Olise, who slipped a precise pass to Bradley Barcola. Barcola finished with a powerful strike. France kept pressing after the second goal. Sweden looked to Alexander Isak and Viktor Gyokeres for a route back into the match, but failed to create clear chances against the French defense. Mbappe sealed the win in the 74th minute. Olise provided the assist again, setting up Mbappe for another composed finish to make it 3-0. Mbappe's two goals kept him firmly in the Golden Boot race. Olise, who plays for Bayern Munich, recorded two assists to take his tournament tally to five, moving him into sole possession of first place in the assists chart. France will face Paraguay in the round of 16 at Philadelphia Stadium on July 4. Paraguay advanced after beating Germany on penalties. Co-host Mexico also reached the last 16, using home advantage to full effect. Mexico had been scheduled to face Ecuador at Mexico City Stadium at 7 p.m. local time, but kickoff was delayed by an hour because of heavy rain and lightning. The delay did little to disrupt Mexico's focus. The co-hosts scored twice in the first half and beat Ecuador 2-0. Julian Quinones opened the scoring in the 22nd minute. After receiving a pass from Roberto Alvarado during a quick transition, Quinones fired a powerful shot into the Ecuador net. Raul Jimenez added the second goal in the 31st minute, giving Mexico firm control of the match before halftime. Ecuador tried to respond through pace on both flanks, but could not break down the Mexican defense. In the second half, Mexico looked more dangerous, using its physical edge and Ecuador's space behind the back line to create further chances. Ecuador finished the match with 10 men after Piero Hincapie was sent off in stoppage time. Hincapie was dismissed for covering his mouth during an exchange with Santiago Gimenez, a violation of the so-called Vinicius rule. It was the second such case of the tournament, following Paraguay's Miguel Almiron. Quinones has emerged as one of Mexico's key attacking players at this World Cup. Before the tournament, he had scored just once for the national team, but goals against South Africa in the opener and Ecuador in the knockout stage have lifted his international tally to three. Mexico has now won all four of its matches at this World Cup, scoring eight goals without conceding. It was also Mexico's first World Cup knockout win that sent the team into the next round since the 1986 tournament on home soil. Mexico will face the winner of England and DR Congo in the round of 16 at the same stadium on July 5. 2026-07-01 14:33:05
Korea's exports top $100 bln in June and near $500bn for H1 SEOUL, July 01 (AJP) - South Korea’s monthly exports topped $100 billion for the first time in June, with chips taking up nearly half of the record shipments, government data showed Wednesday. Exports reached $102.25 billion in June, up 70.9 percent from a year earlier, of which semiconductors reached $44.82 billion, nearly tripled on year, according to the Ministry of Trade, Industry, and Resources. It marked the first time Korea’s monthly exports exceeded the $100 billion threshold, and the first time chip shipments topped $40 billion on monthly basis. IT shipments that include chips hit $54.1 billion, up 308.8 percent on year. Imports rose 30.1 percent on year to $66.10 billion, bringing the trade surplus to a record $36.15 billion. The data showed Korea’s trade account remained in large surplus despite a sharp rise in imports, underscoring the strength of export growth rather than a decline in inbound shipments. For the first half of the year, exports rose 48.4 percent from a year earlier to $496.71 billion, raising expectations for $1 trillion annual record. Imports increased 16.6 percent to $358.39 billion over the same period. The cumulative trade surplus for January to June stood at $138.32 billion. The June figures also showed record strength on a daily basis. Average daily exports, adjusted for working days, reached $4.54 billion, up 59.5 percent from a year earlier. There were 22.5 working days in June this year, compared with 21.0 days a year earlier. 2026-07-01 11:01:48
Korea's growth estimates turn more sanguine on stronger chip power SEOUL, July 01 (AJP) -South Korea’s economic growth forecast for this year is turning more sanguine regardless of energy challenges on sizzling chip demand. More than 10 domestic and foreign institutions project the economy to grow in the 3 percent range, well above the Bank of Korea’s latest forecast of around 2 percent, with some even forecasting around 4 percent. British research firm Capital Economics recently raised its forecast for Korea’s real gross domestic product growth this year to 4.0 percent. The firm had projected growth of 1.0 percent in February, before lifting the estimate to 1.6 percent in March, 2.7 percent in April and 4.0 percent last month. It reportedly cited stronger exports driven by demand related to artificial intelligence. Among 42 domestic and foreign institutions tracked by Bloomberg, 11 have forecast Korea’s economy to grow by 3 percent or more this year. Korean Reinsurance Co. gave the highest estimate at 4.1 percent, followed by Capital Economics at 4.0 percent. JPMorgan projected growth of 3.7 percent, while National Australia Bank, ANZ and iM Securities each forecast 3.6 percent. Bloomberg Economics and Citi each projected 3.5 percent growth. Bank of America and Australia & New Zealand Banking Group each forecast 3.1 percent, while ING Financial Markets and Germany’s DekaBank each projected 3.0 percent. Citi reportedly raised its Korea growth forecast on Tuesday to 3.5 percent from 3.1 percent. The bank was said to have reflected stronger-than-expected economic indicators in April and May, infrastructure investment linked to technology-related capital spending and the possibility of a second supplementary budget worth more than 25 trillion won by early September. Domestic research institutions are also revising their forecasts upward. Woori Finance Research Institute raised its 2026 growth forecast for Korea to 3.0 percent in an economic brief released Tuesday - up 1 percentage point from its previous consensus. The institute said stronger exports and investment led by the semiconductor sector, along with the expected impact of supplementary budget spending, would largely offset the oil price shock from the Middle East war. The Bank of Korea raised its growth forecast in May to 2.6 percent from 2.0 percent. Korea’s real GDP grew 1.8 percent in the first quarter from three months earlier and 3.8 percent on year. The Korea Development Institute, a state-run think tank, forecast in May that the Korean economy would grow 2.5 percent this year, supported by strong semiconductor exports and an improving domestic demand recovery. KDI expected exports to rise 4.6 percent this year on the back of robust chip shipments, while facility investment was also projected to post relatively solid growth due to strong investment demand in the semiconductor sector. 2026-07-01 09:48:40
South Korea's foreign direct investment rises for 3rd consecutive quarter SEOUL, June 30 (AJP) - South Korea's foreign direct investment (FDI) rose in the first three months of this year, extending its growth streak to a third consecutive quarter. According to data released Tuesday by the Ministry of Finance and Economy, the country’s FDI reached $21.74 billion in the first quarter, up 36.2 percent from a year earlier, led by investment in financial and insurance services and a sharp increase in flows to the U.S. The growth followed a 5.7 percent on-year decline to US$15.43 billion in the second quarter of last year, before rising 33.7 percent to $19.64 billion in the third quarter and 20.9 percent to $22.34 billion in the fourth quarter, continuing its upward trend. By sector, investment in finance and insurance accounted for the largest, at $13.38 billion, up 63 percent from a year earlier. Manufacturing investment fell 5.7 percent to $3.4 billion. Investment in information and communications jumped 220.4 percent to $1.19 billion, while investment in professional, scientific and technical services surged 322.2 percent to $910 million. Real estate investment declined 23.6 percent to $840 million. By region, North America drew the largest amount at $10.26 billion, up 69.2 percent from a year earlier. Investment in Europe rose 40.1 percent to $5.13 billion, while investment in Asia increased 13.2 percent to $3.5 billion. Investment in Latin America fell 4.4 percent to $2.36 billion. The U.S. was the largest destination, with investment reaching $10.15 billion in the first quarter, up 107.6 percent from a year earlier and marked the largest quarterly investment into the country since the first quarter of 2022. South Korea's investment in the U.S. rose from $4.89 billion in the first quarter of last year to $5.78 billion in the second quarter, $8.32 billion in the third quarter, and $6.73 billion in the fourth quarter, before climbing to $10.15 billion in the first quarter of this year. Luxembourg was the second-largest destination, with investment rising 97.9 percent to $2.83 billion. Investment in the Cayman Islands fell slightly by 0.5 percent to $2.08 billion. In Singapore, it rose sharply by 115.7 percent to $1.05 billion, while in Vietnam it increased by 55.1 percent to $730 million. FDI generally refers to South Korean individuals or companies acquiring stakes in foreign firms providing long-term loans, or expanding overseas operations. It typically includes corporate acquisitions and equity investments, while small retail purchases of foreign stocks are usually excluded. 2026-06-30 16:59:04
Two weak currencies, two different stories: Indonesia and Korea SEOUL, June 30 (AJP) - Crisis-era exchange rates and relentless foreign stock selling have become familiar headaches for policymakers in both Indonesia and South Korea. At first glance, the two economies appear to face the same challenge. A closer look tells a different story. The Indonesian rupiah's slide to record-low territory has revived memories of past currency crises, putting renewed pressure on Jakarta as investors question whether the country's external buffers are strong enough to withstand a prolonged selloff. The rupiah weakened beyond 18,000 per U.S. dollar this month, its weakest level on record, making it one of Asia's poorest-performing currencies this year. The decline reflects far more than broad dollar strength. It has coincided with persistent foreign selling of Indonesian equities, concerns over fiscal discipline, a widening current account deficit and uncertainty over the country's status in MSCI's emerging-market indexes. Taken together, those factors have made the rupiah's weakness far more than a routine exchange-rate adjustment, even if Indonesia is nowhere near a repeat of the 1997-98 Asian financial crisis. The first fault line is the current account. Indonesia posted a $4 billion current account deficit in the first quarter, equivalent to 1.09 percent of gross domestic product, according to Bank Indonesia. The central bank expects the deficit to remain between 0.5 percent and 1.3 percent of GDP this year. A current account deficit is not inherently alarming. But it leaves the economy dependent on continued capital inflows to finance its external position — a more difficult proposition when foreign investors are already withdrawing from local financial markets. Indonesia's equity market has come under sustained pressure this year, with foreign selling further boosting demand for dollars. Investors have also grown increasingly cautious as MSCI continues to review Indonesia's market classification. The index provider has extended its review until November, leaving unresolved the possibility that Indonesia could lose its emerging-market status. Kim Geun-a, an analyst at Hana Securities, said in a recent report that foreign investors are likely to remain cautious until Jakarta demonstrates that promised market reforms have been implemented. She added that delayed foreign inflows could place additional pressure on the rupiah, particularly as Indonesia's foreign exchange reserves have declined. The country's reserves stood at $144.9 billion at the end of May, down from the previous month. Bank Indonesia said the stockpile was sufficient to cover 5.6 months of imports, or 5.5 months of imports and government external debt repayments. While that remains comfortably above the widely accepted adequacy threshold of three months of imports, the recent decline has focused investor attention on how much room the central bank has to defend the currency should depreciation pressures persist. Bank Indonesia has already moved into full defense mode. The central bank raised its benchmark BI Rate by 25 basis points to 5.75 percent at its June policy meeting, citing the need to stabilize the rupiah while keeping inflation within target. It has also intensified intervention in both spot and derivative currency markets while adjusting yields on rupiah-denominated securities to attract foreign portfolio investment. Taken together, the measures underscore that policymakers view the rupiah's weakness not simply as a currency-market issue but as a broader threat to capital flows and investor confidence. Fiscal policy has emerged as another pressure point. The Korea International Trade Association's Jakarta office has identified concerns over fiscal discipline and policy credibility as additional factors weighing on the rupiah. President Prabowo Subianto's ambitious spending plans could require greater government borrowing and increased bond issuance, raising questions about fiscal sustainability and the risk premium demanded by investors. Those concerns have already forced Jakarta to scale back one of Prabowo's flagship initiatives. Indonesia has suspended its free nutritious school meal program during the June 22-July 13 school holiday and plans to pause the program during future breaks as well. Officials are also considering cutting the program's budget by roughly 40 trillion rupiah this year. The move does not amount to an abandonment of the policy. It does, however, illustrate how currency weakness, fiscal pressure and investor concerns over policy credibility are beginning to constrain even politically important spending priorities. For now, Indonesia retains substantial buffers. Foreign exchange reserves remain above internationally accepted adequacy levels, inflation is under control and the central bank has demonstrated its willingness to use both monetary policy and market intervention to support the rupiah. The country's challenge is better described as a classic emerging-market stress test: a weakening currency, current account deficits, sustained foreign portfolio outflows and mounting questions over policy credibility occurring simultaneously. South Korea illustrates why not every sharp currency depreciation carries the same implications. The Korean won has also ranked among Asia's weakest currencies this year. On Tuesday, it briefly weakened beyond 1,550 per dollar during intraday trading for the first time in 16 sessions before ending at 1,549.4, down 4.2 won from the previous session. The rupiah, meanwhile, hovered near 17,900 per dollar. Korea's external fundamentals, however, remain fundamentally different. The Bank of Korea said the country recorded a $28.29 billion current account surplus in April, supported by recovering semiconductor exports and a stronger goods balance. Its foreign exchange reserves stood at $427 billion at the end of May—roughly three times Indonesia's holdings. That does not mean the won's weakness is inconsequential. Rather than reflecting a shortage of foreign currency, Korea is experiencing a structural disconnect in which dollars earned through trade are increasingly staying overseas as households expand overseas investment, institutional investors accumulate foreign assets and corporations retain larger dollar balances abroad. The result is a domestic dollar market that appears tighter than the country's overall external position would suggest. At first glance, the won and the rupiah tell the same story: weak Asian currencies struggling against a strong-dollar environment. The underlying economics, however, are fundamentally different. Indonesia remains dependent on sustained foreign capital inflows to finance its external deficit while preserving investor confidence in fiscal policy. South Korea, by contrast, continues to generate sizable external surpluses and maintains ample foreign exchange reserves. Its challenge is not attracting dollars but channeling them back into the domestic market. Both currencies now trade near levels last seen during Asia's financial crisis. But one reflects pressure on external financing and policy credibility, while the other reflects a structural transformation in capital flows. That distinction makes all the difference. 2026-06-30 16:46:18
World Cup 26: Brazil stop Japan, Germany crash out, Morocco advance SEOUL, June 30 (AJP) - Brazil ended Japan's upset bid with a dominant second-half comeback, Germany suffered another World Cup collapse and Morocco extended its recent run of strong international results as the 2026 FIFA World Cup round of 32 continued on Monday. Brazil came from behind to beat Japan 2-1 at Houston Stadium in Houston, Texas, in a match that kicked off at noon local time. Japan took the lead in the 29th minute through Kaishu Sano, whose long-range strike rewarded a disciplined first-half display by Hajime Moriyasu's side. For much of the opening half, Japan looked compact and confident, matching Brazil's intensity and troubling the five-time champions in transition. But Brazil took control after halftime. Carlo Ancelotti adjusted his approach, leaning more heavily on width, crosses, aerial power and pace, and Japan spent much of the second half pinned back. The equalizer came in the 56th minute, when Casemiro headed in Gabriel Magalhaes' cross. Japan failed to register a single shot on target after halftime and struggled to regain control after Casemiro's goal, with Brazil continuing to stretch the back line through the flanks and fresh legs off the bench. The pressure finally told in stoppage time. Gabriel Martinelli scored the winner in the 95th minute after being set up by Bruno Guimaraes, ending Japan's hopes of a first World Cup knockout-stage victory. Japan had previously reached the round of 16 in 2002, 2010, 2018 and 2022, only to lose to Turkey, Paraguay, Belgium and Croatia, respectively. This time, under the expanded 48-team format, Japan advanced to the round of 32 but again failed to clear the knockout barrier after falling to Brazil. Brazil advanced to the round of 16, where it will face the winner of Ivory Coast and Norway in New Jersey on July 5. The day's biggest shock came in Foxborough, Massachusetts, where Paraguay knocked out Germany on penalties after a 1-1 draw at Boston Stadium. Paraguay took the lead through Julio Enciso before Kai Havertz equalized for Germany with a header. Germany had more possession and pushed for a winner, but Paraguay stayed compact, absorbed pressure and forced the match into extra time and then penalties. In the shootout, Paraguay goalkeeper Orlando Gill made two key saves. Havertz, Nick Woltemade and Jonathan Tah failed to convert for Germany. Jose Canale then scored Paraguay's first sudden-death penalty to seal a 4-3 shootout win. It was Germany's first defeat in a World Cup penalty shootout. The result extended Germany's prolonged World Cup decline. The four-time champions were eliminated in the group stage in 2018 after defeats to Mexico and South Korea, and again failed to advance from the group stage in 2022. This time, Germany exited in the round of 32, meaning it has failed to reach the last 16 in three consecutive World Cups. Paraguay will face the winner of France and Sweden in the round of 16 on July 4. Morocco completed the day's drama by beating the Netherlands 3-2 on penalties after a 1-1 draw at Estadio Monterrey in Guadalupe, Mexico. The Netherlands went ahead in the 72nd minute through Cody Gakpo, who finished from Crysencio Summerville's assist before celebrating in tears. Gakpo had remained with the Dutch squad after he and his partner suffered the loss of their unborn child during the tournament. Morocco refused to fade. In the first minute of stoppage time, Issa Diop headed in a cross to send the match into extra time. Neither side could find a winner in the additional 30 minutes. The shootout was tense and erratic. Achraf Hakimi and Neil El Aynaoui failed for Morocco, while Jurrien Timber and Justin Kluivert missed for the Netherlands. Yassine Bounou also saved Summerville's attempt. Ismael Saibari converted the decisive kick to send Morocco through. Morocco extended a run of strong results on the international stage. The Atlas Lions became the first African team to reach a World Cup semifinal in Qatar in 2022 and won bronze in men's football at the 2024 Paris Olympics. They also reached the Africa Cup of Nations final this year and later lifted the trophy after being awarded a forfeited win following their defeat to Senegal. With players such as Hakimi, Noussair Mazraoui and Bounou, Morocco again showed the depth, physicality and tournament resilience that have made it one of the most credible knockout-stage teams outside the traditional European and South American powers. The Netherlands, which reached the quarterfinals in Qatar before losing to eventual champion Argentina on penalties, exited one round earlier this time. Morocco will face co-host Canada in Houston on July 4. 2026-06-30 15:11:54
Korea sees sharpest rise in zombie firms among major economies SEOUL, June 30 (AJP) -Despite the benchmark KOSPI's spectacular run, South Korea saw the largest increase in the share of zombie companies among major economies between 2017 and 2025, with more than one in four listed firms unable to cover interest expenses with their earnings for three consecutive years, the country's largest business lobby said Tuesday. The Federation of Korean Industries said marginal companies accounted for 27.6 percent of Korea's listed firms in 2025, up 15.8 percentage points from 11.8 percent in 2017. A marginal company is defined as a firm whose interest coverage ratio, calculated by dividing earnings before interest and taxes by interest expenses, stays below 1 for three straight years. Korea’s added the most among six major economies in FKI study on listed companies in Korea, the United States, Japan, Germany, Britain and France. The United States had the highest marginal company ratio at 30.7 percent in 2025, followed by Korea at 27.6 percent and France at 26.4 percent. But Korea posted the largest increase over the nine-year period. The U.S. ratio rose 9.5 percentage points from 21.2 percent in 2017 to 30.7 percent in 2025, while France gained 5.5 percentage points, Britain 2.8 percentage points, Germany 2.3 percentage points and Japan 1.9 percentage points. The FKI said it used the 8-year - from 2017 to 2025 - period to avoid distortions from global shocks in 2015 and 2016, including China’s stock market turmoil, commodity price swings and Brexit-related uncertainty. Korea also ranked second in the share of temporary marginal companies, defined as firms with an interest coverage ratio below 1 in a given year. The ratio of temporary marginal firms in Korea reached 43.9 percent in 2025, just below the U.S. figure of 44.0 percent but higher than France’s 40.1 percent, Britain’s 36.7 percent, Germany’s 27.0 percent and Japan’s 9.8 percent. Korea’s temporary marginal company ratio has remained above 40 percent for three straight years, rising from 41.8 percent in 2023 to 43.7 percent in 2024 and 43.9 percent in 2025. The weakness was more pronounced on the tech-heavy KOSDAQ market. The marginal company ratio among KOSDAQ-listed firms reached 32.6 percent in 2025, nearly double the KOSPI’s 16.7 percent. The KOSDAQ ratio rose 19.5 percentage points from 13.1 percent in 2017, while the KOSPI ratio increased 7.1 percentage points from 9.6 percent. By industry, Korea’s arts, sports and recreation sector had the highest marginal company ratio at 60.0 percent in 2025. It was followed by professional, scientific and technical services at 36.8 percent, wholesale and retail at 36.4 percent, information and communications at 32.5 percent, manufacturing at 25.6 percent and construction at 23.6 percent. The largest increase since 2017 was seen in professional, scientific and technical services, where the ratio jumped 30.0 percentage points from 6.8 percent to 36.8 percent. The information and communications sector rose 19.6 percentage points, wholesale and retail 18.6 percentage points and manufacturing 14.4 percentage points over the same period. “The rapid rise in Korea’s marginal listed companies suggests that business conditions have deteriorated in major industries other than semiconductors, amid worsening trade conditions, higher exchange rates, raw material and labor costs, and weak domestic demand,” said Lee Sang-ho, head of the FKI’s economic division. Lee said stronger institutional support is needed to restore corporate vitality and competitiveness. The analysis was based on Capital IQ data as of June 5, covering 2,558 listed firms in Korea, 3,817 in the United States, 3,739 in Japan, 1,155 in Britain, 332 in Germany and 690 in France. Financial companies, real estate investment trusts, funds, exchange-traded funds and special purpose companies were excluded. 2026-06-30 13:24:02