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

World Cup 26: Korea held by South Africa after disjointed first half SEOUL, June 25 (AJP) - South Korea went into halftime scoreless against South Africa on Thursday after a disjointed first half in which they struggled to beat pressure, move the ball through midfield and turn possession into meaningful chances. South Korea kicked off their final Group A match at Monterrey Stadium in Mexico knowing a draw would be enough to secure second place and a spot in the Round of 32. Opta’s pre-match model had given South Korea a 59.2 percent chance of winning, more than three times South Africa’s 17 percent. The first half, however, played out nothing like those numbers suggested. Korea started brightly, using Hwang Hee-chan and Lee Tae-seok to attack down the flanks. An early corner led to a Kim Min-jae header, but South Africa blocked it near goal. Lee Kang-in then came close in the seventh minute, meeting a cross from the left and sending his shot narrowly wide of the right post. But South Africa soon settled into the match and began to expose Korea’s weaknesses. They pressed high, closed off Lee Kang-in’s passing lanes and repeatedly forced mistakes from Korea’s midfield. Hwang In-beom and Paik Seung-ho also struggled under pressure, giving South Africa chances to break quickly. South Africa looked especially dangerous when attacking the space behind Korea’s right side, where Lee Gi-hyuk was repeatedly tested by pace and long balls. Around the 14th minute, South Africa looked for tall striker Evidence Makgopa with a cross into the box, but Lee challenged him well enough to prevent a clean header. Korea had several warnings after that. In the 18th minute, South Africa broke forward at speed, only for Lee to block the danger with his body. A minute later, South Africa recycled a corner into a long-range shot that went straight to goalkeeper Kim Seung-gyu. Another second-ball chance came around the 29th minute, again forcing Kim into a save. Korea escaped, but the sequence showed how fragile their defensive balance had become. At the other end, Korea’s attacks became predictable. Lee Tae-seok continued to overlap on the left, but his crosses lacked accuracy and repeatedly ended in goal kicks or clearances. Hwang Hee-chan’s long-range effort in the 34th minute also flew well wide. South Africa, meanwhile, appeared well prepared for Lee Kang-in’s left foot. His passes were cut out several times, and Korea failed to find a reliable route into the final third. The half ended 0-0 after South Africa’s final corner in stoppage time came to nothing. South Korea are still on course to advance if the score holds, but the first half left Hong Myung-bo’s side needing a sharper response after a performance that was far below expectations. 2026-06-25 10:59:34
World Cup 26: Korea holds its breath as Round of 32 hangs in balance SEOUL, June 25 (AJP) - Thousands of football fans packed central Seoul's Gwanghwamun from early Thursday morning, filling public viewing areas and gathering around giant screens hours before South Korea's decisive 10 a.m. (Korea time) World Cup kickoff, while millions more across the country glued themselves to televisions and smartphones for the make-or-break clash with South Africa. The entire nation would come to a standstill for 90 minutes as South Korea faced South Africa at Monterrey Stadium in Mexico in their final Group A match, needing only a draw to secure a place in the Round of 32. South Africa has even higher stakes, needing nothing less than victory to keep its knockout hopes alive. Hong Myung-bo is expected to retain the core of Son Heung-min, Lee Kang-in, Hwang In-beom and Kim Min-jae, although changes in attack and at wing-back remained possible after Korea's blunt display in the 1-0 defeat to Mexico. South Africa, by contrast, is dealing with midfield absences after Teboho Mokoena and Siphephelo Sithole were ruled out through suspension, forcing them to reorganize the center of the pitch. For Hong, the match also carries personal significance. His first World Cup campaign as Korea coach ended painfully in Brazil in 2014 with a 4-2 defeat to Algeria, and South Korea have beaten African opposition only once at the World Cup — against Togo in 2006 — while drawing with Nigeria and losing to Algeria and Ghana. Mexico also exposed a tactical weakness that South Africa was expected to target. By shutting down Lee Kang-in and Hwang In-beom in midfield and denying service to Son Heung-min, Mexico disrupted Korea's buildup and reduced Hong's side to just one shot on target. South Africa were expected to defend deeper rather than press aggressively, meaning Korea would have to show far greater creativity against a compact defense. The qualification equation nevertheless remains in South Korea's favor. A draw would guarantee second place in Group A regardless of the outcome between Mexico and Czechia because Korea held the head-to-head advantage over the Europeans. Victory would send Hong's side into the Round of 32 with renewed momentum after the setback against the hosts. Defeat is the only scenario that brings real danger. If South Africa pulls off the upset, Korea's fate would hinge on the Mexico-Czechia result and the standings among the tournament's best third-placed teams, turning what was within Hong's side's control into an anxious wait — with the fingers of more than 50 million people back home firmly crossed. 2026-06-25 09:26:28
Korea's business sentiment dips, divide deepens on narrow chip-led growth SEOUL, June 25 (AJP) - South Korea's business sentiment deteriorated by the steepest clip in 15 months while factory confidence climbed to its highest level in nearly four years, further underscoring the widening divide in the economy whose vitality is concentrated on chipmaking floors, central bank data showed Thursday. According to the Bank of Korea, the Composite Business Sentiment Index (CBSI) for all industries fell 1.2 points from a month earlier to 97.7 in June. The decline marked the sharpest monthly fall since January 2025, when the index dropped 1.4 points. The reading remained below the benchmark level of 100, indicating corporate sentiment was still weaker than its long-term average. The setback came after a sharp rebound in May, when strong exports, a record-setting stock market and easing expectations over oil and currency shocks lifted business confidence close to the neutral threshold. The latest data suggest the recovery has become more uneven rather than fully reversed, with exporters and large manufacturers continuing to benefit from resilient external demand while domestic-facing and service-sector businesses lose momentum. Manufacturing CBSI rose to 101.2 in June from 100.8 in May, remaining above the benchmark for a second straight month. It was the highest level since August 2022, when the index stood at 102.9. The BOK said the improvement was driven mainly by funding conditions, which contributed 0.4 point, and new orders, which added 0.2 point. Underlying manufacturing indicators pointed to a widening gap between export and domestic demand. The export BSI rose to 96 from 94, while new orders increased to 88 from 87. Domestic sales, however, fell to 85 from 88, and overall sales slipped to 91 from 93. Export-oriented manufacturers continued to outperform companies reliant on the domestic market. Exporters' CBSI rose to 106.4 from 105.3, while the reading for domestically focused firms edged down to 98.0 from 98.4. The divide was equally evident by company size. Large manufacturers saw their CBSI rise to 104.5 from 103.4. Small and medium-sized enterprises, however, slipped to 95.7 from 96.2, underscoring that the manufacturing recovery remains concentrated among larger exporters. Non-manufacturing sentiment moved in the opposite direction. The non-manufacturing CBSI fell to 95.4 from 97.5 as weaker sales and profitability, compounded by higher energy-related costs and sluggish consumption, dragged down the index. Sales and profitability each shaved 0.9 point off the non-manufacturing reading. Lee Heung-hoo, head of the BOK's economic sentiment survey team, said manufacturing improved on robust semiconductor-led IT exports, while non-manufacturing weakened mainly because of sluggish construction activity and a payback from stronger holiday-related demand in arts, sports and leisure businesses in May. The divergence suggests last month's broader rebound has yet to translate into a sustained recovery in domestic demand. Corporate concerns also shifted in June. Rising raw material prices remained manufacturers' biggest challenge, cited by 27.7 percent of respondents. But the share fell from 32.8 percent in May, suggesting some easing in commodity- and energy-related cost pressures. Exchange-rate volatility, meanwhile, became a more visible burden. The share of manufacturers citing currency movements as a management concern rose to 7.8 percent from 5.0 percent, while the corresponding share among non-manufacturers increased to 5.7 percent from 3.7 percent. The shift marked a contrast with May, when businesses appeared to be moving beyond concerns over oil prices, exchange rates and geopolitical uncertainty. In June, currency worries resurfaced even as raw material price pressures eased. Companies also turned more cautious about the near-term outlook. The July all-industry CBSI outlook fell to 95.2 from 97.6. The manufacturing outlook dropped to 98.2 from 100.3, while the non-manufacturing outlook declined to 93.2 from 95.9. The Economic Sentiment Index (ESI), which combines business and consumer sentiment, fell to 96.8 in June from 97.5 in May. Its cyclical component was unchanged at 95.1, suggesting the broader economy has yet to reach a clear turning point despite the resilience of semiconductor-driven exports. The June survey was conducted from June 10 to 17 among 3,184 companies, including 1,780 manufacturers and 1,404 non-manufacturers. 2026-06-25 07:20:03
Korea's migration to developed status rejected and the won is why SEOUL, June 24 (AJP) - The stock market rebounded, but the Korean won slipped deeper toward crisis-era lows after South Korea once again failed to make MSCI's developed-market watchlist, a sober reminder that the currency - not the equities - is the stumbling block to an upgrade. The KOSPI has quadrupled over the past 18 months to become one of the world's best-performing equity markets since 2025, but its rally alone was not enough. For years, Seoul has tried to secure MSCI developed-market status by improving market accessibility through English-language disclosures, settlement systems and extended foreign-exchange trading hours. Fellow index provider FTSE Russell has classified South Korea as a developed market since 2009, but MSCI remains unconvinced. In its annual review Tuesday, MSCI acknowledged the progress but pointed to a familiar obstacle. "The Korean won is not deliverable offshore. Even more concerning, onshore liquidity during the extended FX trading hours remains largely insufficient to support tight execution at standards comparable to those observed in developed markets." The message was straightforward: global investors still do not believe they can trade the won with the same depth, consistency and predictability available in developed-market currencies. That distinction matters because hopes have grown in Seoul that MSCI inclusion could strengthen both equities and the currency. The won has remained under pressure despite the stock rally, closing at 1,544.70 per dollar on Tuesday, down 2.4 percent from the end of May and more than 7 percent weaker than at the beginning of the year. President Lee Jae Myung frowned at what he called the won's "excessive" weakness relative to Korea's economic fundamentals, while Finance Minister Koo Yun-cheol attributed the move to foreign investors' profit-taking and portfolio rebalancing. Government officials maintained a brave face Wednesday, saying MSCI recognizes Korea's reform efforts and that continued progress should eventually lead to an upgrade. But MSCI's concerns are structural rather than cyclical. Foreign investors must convert money into won to buy Korean stocks and convert it back when they sell. Yet the currency remains unavailable in a fully deliverable offshore market, while liquidity during extended trading hours has yet to prove itself. MSCI also cited the limited use of omnibus accounts and in-kind transfers, as well as operational burdens surrounding short selling and settlement procedures. The issue, in other words, is not whether foreign money can enter Korea. It is whether investors can trade Korean assets, hedge currency risk and move capital without unusual friction. That is also why MSCI inclusion should not be viewed as a straightforward remedy for won weakness. If Korea joins the developed-market index, it would simultaneously leave the emerging-market benchmark. Funds tracking emerging-market indexes would have to sell Korean stocks, while developed-market funds would buy them. The net effect may be far smaller than many assume. Korea carries a relatively large weighting in emerging markets. In developed-market benchmarks, however, it would become a much smaller component alongside the United States, Japan and major European economies. Some estimates suggest net inflows could amount to around $4 billion after offsetting the two streams, while others point to temporary net outflows depending on the timing and mechanics of rebalancing. That makes MSCI inclusion a poor candidate for a short-term defense against currency weakness. The Bank of Korea echoed that view Wednesday. Deputy Governor Jang Jeong-su said recent won weakness reflects foreign stock selling, profit-taking and portfolio adjustments rather than a deterioration in economic fundamentals. He added that the exchange rate should stabilize gradually if foreign selling subsides, supported by Korea's current-account surplus and solid external balances. An upgrade could still produce meaningful long-term benefits. It would help reduce the Korea discount and strengthen the country's standing among global investors. But that would be the result of a more open and predictable market structure, not a policy tool capable of stabilizing the exchange rate on its own. The debate over whether the won must become something close to a reserve currency also risks missing the point. A Bank of Korea official, speaking on condition of anonymity, said MSCI is not asking Korea to turn the won into another dollar, euro or yen. "The issue is whether global institutional investors can convert, hedge and settle the won without being constrained by time zones or trading restrictions," the official said. That may be the clearest takeaway from this week's decision. MSCI is not questioning Korea's economic strength. It is questioning whether Korea's currency and market infrastructure are open enough for global investors to operate seamlessly. Korea may eventually secure a developed-market upgrade if reforms continue. But this week's setback shows that such a milestone would be the outcome of structural reforms, not a shortcut to a stronger won. 2026-06-24 17:32:06
World Cup 26: Ronaldo returns as Colombia advance, England held by Ghana SEOUL, June 24 (AJP) - Cristiano Ronaldo scored twice to revive Portugal’s World Cup campaign, Colombia secured a place in the knockout stage and England were held by Ghana as Groups K and L moved closer to their final-round showdowns on Tuesday local time. Croatia also beat Panama 1-0 to stay alive in Group L, eliminating the Central American side after two straight defeats. Portugal produced the statement performance of the day, beating Uzbekistan 5-0 in a Group K match in Houston. Ronaldo, who had been quiet in Portugal’s opening 1-1 draw with DR Congo, struck in the sixth and 39th minutes to put Portugal in control before halftime. The goals made him the first player to score in six different World Cups. His opener against Uzbekistan was also his first World Cup goal from open play since his header against Morocco in 2018. Nuno Mendes scored Portugal’s second goal with a free kick in the 17th minute, before Uzbekistan goalkeeper Abduvohid Nematov conceded an own goal in the second half. Rafael Leao completed the scoring late in the match. The victory lifted Portugal to four points and put them on the verge of the knockout stage after their flat start against DR Congo, though they still need at least a draw against Colombia to remove any uncertainty over a top-two finish. Uzbekistan, playing in their first World Cup, stayed on zero points after two defeats. They are not mathematically eliminated, but their heavy goal-difference deficit leaves them with only a slim third-place route. In Group L, England failed to turn possession into goals in a 0-0 draw with Ghana in Boston. England did not register a shot on target in the first half as Ghana sat deep, defended in two compact lines and made clear that a point would suit their plan. The game opened up after halftime, and England created several chances, but Ghana’s defensive structure held. England’s clearest opening came when the ball came back off the woodwork and fell to Harry Kane, but the captain lifted his rebound over the bar from close range. Ghana, who had beaten Panama with a late winner in their opening match, achieved exactly what they needed. The draw moved them to four points and put them in a strong position in the race for the Round of 32. England also moved to four points but missed the chance to secure early qualification after opening the tournament with a 4-2 win over Croatia. Croatia then kept their own hopes alive with a tense 1-0 win over Panama in Toronto, giving Luka Modric a victory in his 200th international appearance. Panama, who qualified as the top team from CONCACAF excluding the three co-hosts, showed their strength in the first half and hit the post as they tried to take their first points of the tournament. But Croatia broke through in the second half when Ante Budimir finished from the right side after a cross and attacking move involving Marco Pasalic and Josip Stanisic. Panama responded with pace on both wings and continued to threaten after falling behind, but they could not find an equalizer. The defeat eliminated Panama and locked them into bottom place in Group L, while Croatia moved to three points and kept pressure on England and Ghana before the final round. The last match of the day saw Colombia beat DR Congo 1-0 in Group K at Guadalajara Stadium. Colombia controlled much of the match but had to work hard for the breakthrough, with two goals ruled out for offside or a foul. The decisive moment came in the second half when Daniel Munoz scored from the right side of the penalty area, his shot taking a deflection before finding the net. DR Congo, who had earned a 1-1 draw against Portugal in their opening match, nearly rescued a point in stoppage time, but their late shot was kept out by Colombia’s goalkeeper. The win moved Colombia to six points from two matches and secured their place in the knockout stage. Colombia and Portugal will meet in the final round with top spot in Group K at stake. Colombia have already qualified, while Portugal can secure a top-two finish with at least a draw. DR Congo need to beat Uzbekistan to keep a realistic knockout route alive, while Uzbekistan must win and hope to survive through the third-placed team ranking. In Group L, England and Ghana remain on four points, with Croatia on three and Panama eliminated. England need at least a draw against Panama to guarantee a top-two finish, while Ghana can do the same against Croatia. Croatia must beat Ghana to move into the top two, though a draw or defeat could still leave them waiting on the third-placed team ranking. 2026-06-24 15:09:45
BOK warns higher rates could cool asset risks but strain households SEOUL, June 24 (AJP) -Higher interest rates could help cool leveraged bets on stocks and property, but they would also increase burdens on households and create fresh financial risks, the Bank of Korea warned on Wednesday, as senior officials continued to signal that the benchmark rate would rise from the current 2.50 percent. In its June Financial Stability Report, the central bank said Korea’s financial system remains broadly stable, supported by stronger economic growth, resilient financial institutions and sound external payment capacity. But the report pointed to a growing policy dilemma as financial and foreign exchange markets become more volatile, housing prices in Seoul and surrounding areas rise again, and investors take on more leverage to chase asset gains. The BOK, which has kept its base rate at 2.50 percent since last cut in May last year, judged that rates would need to be raised “at an appropriate time” after weighing inflation pressure, economic conditions and financial stability risks. In a separate analysis, the central bank said higher market rates could help ease financial imbalances by restraining debt-funded asset investment and reducing the risk of further asset-price gains. Jang Jeong-su, deputy governor of the BOK, said at a press briefing that rate hikes could help reduce medium- to long-term financial instability. The effect, however, would not be one-sided, he said. “Rate hikes can lower volatility and vulnerabilities in real estate and stock markets, but they can also increase the burden on vulnerable borrowers,” Jang said. The BOK’s Financial Stress Index, which measures short-term stress, stood at 17.2 in May, remaining in the cautionary zone. The Financial Vulnerability Index, which tracks medium- to long-term vulnerabilities, rose to 46.0 in the first quarter, slightly above its long-term average of 45.7. Lim Kwang-kyu, director general of the BOK’s Financial Stability Department, said the FSI is a coincident indicator of short-term stress, while the FVI shows how much financial instability has accumulated over a longer horizon. He said the FSI had risen during the Middle East crisis before easing recently, but added that both indicators remain in the cautionary zone and require close monitoring. Household debt remains one of the central bank’s biggest concerns. Jang said Korea’s high household debt ratio is a problem the economy still needs to solve, although the ratio could decline if nominal gross domestic product continues to grow. But he cautioned that recent nominal GDP growth has been concentrated in specific sectors, making it difficult to view the improvement as broad-based. “Given the steep rise in property prices, we need to stay alert to household debt risks,” he said. Household credit stood at 1,993.1 trillion won at the end of the first quarter, up 3.5 percent from a year earlier. The household debt-to-disposable-income ratio fell to 134.1 percent from 139.7 percent at the end of the third quarter last year, but the share of vulnerable borrowers rose to 6.7 percent by number of borrowers from 6.4 percent over the same period. Household loan growth has also accelerated again. Monthly household loans increased by an average of 2.7 trillion won in the fourth quarter of last year and 3 trillion won in the first quarter, before rising by 3.5 trillion won in April and 9.3 trillion won in May. The BOK said housing transactions ahead of the end of temporary tax relief for multiple-home owners were reflected in loans with a lag, while other loans, including borrowing linked to stock investment, also increased. The central bank warned that the stabilizing effect of higher lending rates could be weakened if profit-taking from the stock market flows into housing. If demand for homes in non-regulated areas strengthens amid rising lease prices, household debt growth could pick up again, the BOK said, calling for consistent management of expectations for further home-price gains. Leveraged stock investment has emerged as another risk, with the rapid rise in Korean stocks compared with major overseas markets appearing to be a key driver, Jang said. “It is true that there are concerns about external effects, where even investors who did not borrow to invest could suffer losses from forced selling,” he said, adding that the BOK would continue to consult with relevant authorities. Asked about recent swings in the KOSPI, Jang said it was difficult to predict whether foreign selling pressure had fully run its course. “If the market rises sharply in a short period, it could again trigger foreign selling,” he said. Foreign investors pulled a net $83.37 billion from Korean securities from January through June 9. Stock investment posted a net outflow of $94.81 billion, while bond investment recorded a net inflow of $11.44 billion. The BOK said the won-dollar exchange rate rose with high volatility due to Middle East-related geopolitical risks and foreign selling of Korean stocks, but foreign currency funding conditions remained broadly favorable and Korea’s external payment capacity stayed strong. Jang said Korea’s failure to be added to MSCI’s developed-market watch list does not erase the progress made in market reforms, saying MSCI has viewed Korea’s reform efforts positively. He said continued work to extend foreign exchange trading hours and establish an offshore won settlement system could eventually lead to inclusion. Hwang Kun-il, the Monetary Policy Board member who oversaw the preparation of the report, said in a separate message that risks from vulnerable sectors, market volatility, rising home prices and leveraged asset investment require continued attention. 2026-06-24 13:56:38
Financial authorities seek to calm concerns after MSCI setback SEOUL, June 24 (AJP) - South Korean financial authorities said Wednesday that it expects to be included in MSCI’s developed-market index in due course if it continues to press ahead with foreign exchange and capital market reforms, after the country again failed to make the index provider’s watchlist for a possible upgrade. The Ministry of Economy and Finance and the Financial Services Commission said in a joint statement that MSCI recognizes the government’s efforts and progress in modernizing Korea’s foreign exchange and capital markets. The two agencies said some reform measures are still under way, while even completed measures need more time before their effects are fully felt by investors. The government said it will quickly activate regular communication channels with major overseas investors to review how reform measures are being used in practice and reflect market feedback. MSCI said in its 2026 annual market classification review released Tuesday that Korea will remain classified as an emerging market, without being placed on the watchlist for a possible upgrade to developed-market status. Korea will therefore stay in MSCI’s emerging market index alongside markets such as China and India. MSCI acknowledged measures announced by Korean authorities to address long-standing investor concerns, but said investors still believe fundamental issues have not been fully resolved. The index provider cited continued limits on offshore won trading and insufficiently tested liquidity during extended onshore foreign exchange trading hours as key reasons behind Korea’s failure to make the watchlist. It also pointed to limited use of omnibus accounts and in-kind transfers, as well as operational burdens related to short-selling rules and settlement procedures. Korea was added to MSCI’s emerging market index in 1992 and placed on the developed-market watchlist in 2008, but failed to win an upgrade due to issues including the absence of an offshore won market, foreign investor registration requirements and restrictions on index data usage. MSCI removed Korea from the watchlist in 2014, and the country has since remained outside even the preliminary review stage for developed-market inclusion for more than a decade. 2026-06-24 10:35:21
Won weakens on Fed jitters, bond yields fall as safety bid offsets FX pressure SEOUL, June 23 (AJP) - The Korean won weakened against the dollar on Monday as the Federal Reserve’s hawkish stance kept pressure on Asian currencies, while government bond yields fell as a sharp stock selloff pushed investors toward safer assets. The won ended the daytime session in Seoul at 1,538.90 per dollar, weakening by 1.90 won from the previous session. The currency came under pressure as investors reassessed the Fed’s policy path after its June meeting delivered a more hawkish dot plot and a firmer message on inflation. The dollar stayed supported by expectations that U.S. rates could remain high for longer, or even rise again, keeping markets focused on the interest-rate gap between Korea and the United States. Weak risk sentiment added further pressure on the won. The benchmark KOSPI tumbled 9.99 percent to close at 8,203.84, with both a sidecar and a marketwide circuit breaker triggered during the session. Foreign investors net sold 4.13 trillion won ($2.68 billion) worth of local shares, adding to pressure on the currency. Bond yields moved lower despite the weaker won. The three-year government bond yield fell 4.0 basis points to 3.770 percent, while the 10-year yield dropped 2.4 basis points to 4.171 percent. A weaker won and a hawkish Fed would normally put upward pressure on Korean yields. Currency weakness can add to import-price risks, while a tighter Fed path limits the Bank of Korea’s room to ease policy. But the scale of the equity selloff shifted the focus to risk aversion. The KOSPI’s nearly 10 percent drop, heavy foreign selling and the activation of trading curbs strengthened demand for government bonds, pushing yields lower despite continued currency weakness. The move appeared to reflect a short-term safety bid rather than a clear shift toward expectations for easier monetary policy. Monday’s trading left Korean markets split across asset classes. The foreign exchange market was driven by Fed concerns, dollar strength and foreign equity selling, while the bond market took its cue from risk aversion triggered by the stock rout. 2026-06-23 17:22:48
Central banks recalibrate post-rate messaging SEOUL, June 23 (AJP) - The dot plot, long one of the U.S. Federal Reserve's most influential communication tools, is undergoing a rethink just as South Korea's central bank is embracing it, highlighting a broader dilemma confronting policymakers worldwide: how to guide markets without locking themselves into a path they may later regret. The divergence underscores a new reality for central banks. Inflation, exchange rates and interest-rate expectations have become harder to manage in an era of geopolitical shocks, volatile energy prices and rapidly shifting market sentiment, forcing policymakers to reconsider not just what they do, but how they communicate what they might do next. New Fed Chair Kevin Warsh offered an early indication of that shift when he declined to submit his own interest-rate projection at his first Federal Open Market Committee meeting on June 16-17. The Fed left its benchmark policy rate unchanged at 3.75 percent, but its dot plot turned more hawkish. The median projection for the federal funds rate at the end of this year rose to 3.8 percent from 3.4 percent in March. Of the 18 officials who submitted projections, nine expected at least one rate increase this year. Warsh was not among them. At his June 17 press conference, Warsh said the Fed would review its communication framework, including the future of the dot plot. The central bank also removed forward-guidance language from its policy statement regarding the timing and extent of future policy adjustments. The dot plot shows where FOMC participants believe interest rates should stand in coming years. Since its introduction in 2012, investors have treated it as one of the most important guides to the future path of U.S. monetary policy. The tool has obvious advantages. It improves transparency by revealing the distribution of policymakers' views and helps align market expectations with central bank intentions. But the dots are conditional projections, not promises. Markets nevertheless tend to interpret them as commitments, making bond yields, currencies and equities highly sensitive to even small shifts in the chart. That transparency can become a constraint. Once investors anchor themselves to a projected rate path, changing economic conditions can force central banks into an uncomfortable choice: surprise markets or appear to be walking back earlier guidance. The Bank of Korea is moving in the opposite direction. Its monetary policy department recently outsourced a study titled "Effects of Monetary Policy Communication Using High-Frequency Data" to examine whether more explicit guidance can improve market functioning. The study will analyze intraday movements in interest-rate swaps, government bond futures and KOSPI 200 futures on policy-decision days to measure how BOK communication affects financial markets. Researchers will focus on two tools: conditional forward guidance that shows the three-month rate views of six Monetary Policy Board members, excluding the governor, and a six-month dot plot in which seven board members each submit three projections for the base rate. The BOK introduced its dot plot at the Feb. 26 policy meeting. After its May 28 meeting, 19 of the 21 dots were positioned above the prevailing base rate. Markets interpreted the chart as a relatively clear signal that policymakers were leaving open the possibility of rate increases in the second half of the year. The exchange-rate backdrop has made that communication challenge even more delicate. The won averaged 1,529.15 per dollar through June 22, its weakest monthly average since February 1998, when it averaged 1,626.7 during the aftermath of the Asian financial crisis. The currency weakened further on June 23, ending Seoul's daytime session at 1,538.90 per dollar as the Fed's hawkish stance continued to pressure emerging-market currencies. That has kept markets intensely focused on the interest-rate gap with the United States and the Fed's policy trajectory. The BOK's challenge has also become more complex. Oil prices and a weaker currency have revived inflation risks, while housing prices and household debt remain major domestic concerns. That increases the need to manage expectations before any actual policy move is made. BOK Governor Shin Hyun-song has long studied the role of communication in monetary policy. During his tenure at the Bank for International Settlements, he examined how central bank signals influence market pricing and investor behavior. At his parliamentary confirmation hearing on April 15, Shin indicated the BOK would maintain its current framework for the time being, arguing that newly introduced communication tools should be evaluated after accumulating sufficient experience. Other major central banks have already migrated toward more flexible language. The European Central Bank has moved away from signaling a specific rate path, instead emphasizing a data-dependent, meeting-by-meeting approach. After its June 11 meeting, the ECB said future decisions would depend on inflation prospects, underlying price pressures and the strength of monetary policy transmission. The Bank of England has adopted similar language. Following its June 18 meeting, policymakers said decisions would be made meeting by meeting, based on incoming data covering inflation, wages, growth, labor-market conditions and inflation expectations. The Bank of Japan does not publish a dot plot at all. It communicates through economic forecasts and the governor's press conferences. After raising its short-term policy rate to 1 percent on June 16, the BOJ employed deliberately conditional language, saying it would adjust the degree of monetary accommodation if the economy and prices evolve in line with its outlook. The evolution reflects a common lesson. Central banks still want to guide markets, but they increasingly want to avoid being trapped by a predetermined path. The BOK is effectively running an experiment by combining Fed-style dot plots with conditional forward guidance. Its new study is designed to measure how that mix influences expectations for interest rates, the won and domestic equities. As the Fed debates the future of the dot plot while the BOK tests its newest communication tools, monetary policy is becoming as much about managing words as managing rates. 2026-06-23 16:29:16
World Cup 26: Messi breaks record as Argentina, France, Norway advance SEOUL, June 23 (AJP) - Lionel Messi became the most prolific scorer in men's World Cup history, France overcame a long weather delay and Norway survived a late Senegal fightback as Argentina, France and Norway all advanced to the knockout stage on Monday local time. Jordan were eliminated after another comeback defeat in Group J, joining Turkiye and Haiti among the teams already out, while Senegal and Iraq were left with only a narrow third-place route in Group I. In Group J, Messi scored twice as Argentina beat Austria 2-0 in Arlington, Texas, sending the defending champions through with six points from two matches. The Argentina captain missed an early penalty but made amends in the 38th minute, moving past Germany’s Miroslav Klose on the all-time World Cup scoring list. He struck again deep into second-half stoppage time to take his tournament tally to 18 goals. Austria, who beat Jordan in their opener, stayed on three points and will face Algeria in their final group match. In Group I, France beat Iraq 3-0 in Philadelphia after the match was held up for nearly two hours because of heavy rain, thunderstorms and lightning risks. Kylian Mbappe gave France the lead in the 14th minute before play was stopped at halftime under local lightning safety protocols. The interruption was one of the most unusual weather-related stoppages at a World Cup since the 1974 West Germany-Poland match, when heavy rain delayed kickoff and left the pitch in Frankfurt waterlogged. Iraq failed to deal with the ball cleanly in the second half, and Mbappe punished the mistake for his second goal of the match. Ousmane Dembele then added a third to complete a comfortable win after an uncomfortable interruption. The result sent France through with six points from two matches, while Iraq stayed on zero points and were pushed to the brink of elimination. Norway joined France on six points after edging Senegal 3-2 in another Group I match. Marcus Pedersen put Norway ahead in the 43rd minute, before Erling Haaland struck twice after halftime in the 48th and 58th minutes. Senegal, however, refused to fade. Ismaila Sarr pulled one back in the 53rd minute and scored again in second-half stoppage time to make it 3-2. Senegal kept pushing until the final whistle and nearly equalized from a late corner, but Sarr’s header went over the bar. The win sent Norway into the knockout stage after only two matches in their first World Cup appearance in 28 years. Norway and France will now meet in the final round to decide top spot in Group I. Senegal, still without a point, must beat Iraq in their final group match to keep even a slim chance of advancing as one of the best third-placed teams. Iraq are not mathematically out because they face Senegal next, but their heavy goal-difference deficit leaves them needing a high-scoring win and help elsewhere. Group J ended with another painful collapse for Jordan, who lost 2-1 to Algeria in Santa Clara after taking the lead for the second match in a row. Nizar Al-Rashdan put Jordan ahead in the first half, giving the team its first-ever lead in a World Cup match. But Algeria turned the game around after halftime. Nadhir Benbouali equalized with a header in the 69th minute, before Amine Gouiri completed the comeback from close range in the 82nd minute. The win kept Algeria alive after their opening defeat to Argentina and moved them to three points. Jordan, who also scored first against Austria before losing 3-1, again failed to protect an early lead and were eliminated from knockout-stage contention in their debut World Cup. Jordan are now locked into bottom place in Group J even if they beat Argentina in their final match. Argentina have already advanced, while Austria and Algeria will meet in a direct fight for position behind the defending champions. 2026-06-23 15:12:12