Journalist
Kim Yeon-jae김연재
duswogmlwo77@ajupress.com
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."
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
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Indonesian Rupiah's Decline Signals Warning for South Korea The Indonesian Rupiah has fallen to a record low, reigniting concerns of a currency crisis in Asia. A combination of a current account deficit, foreign capital outflow, weakened fiscal credibility, and increased money supply has shaken confidence in the currency. While it is difficult to directly compare Indonesia's situation with South Korea, which boasts a large current account surplus and ample foreign reserves, experts caution that South Korea should monitor the Rupiah's decline due to simultaneous occurrences of won depreciation, rising money supply, and structural dollar demand. Rupiah Surpasses 18,000 Mark, Reviving Crisis Concerns Last month, the Rupiah surpassed 18,000 per dollar, marking its lowest point in history. On June 30, it continued to trade around 17,900 per dollar, maintaining its downward trend. The immediate cause appears to be the strength of the dollar. However, the Rupiah's weakness is viewed as a precursor to financial crisis for several reasons. Foreign capital has been fleeing the Indonesian stock market this year. According to Reuters, foreign investors have sold a net $3.89 billion in Indonesian stocks in 2026, with the Jakarta Composite Index dropping nearly 30% at one point. The current account recorded a deficit of $4.01 billion in the first quarter, the largest since the fourth quarter of 2019. Additionally, President Prabowo Subianto's key promise of a 335 trillion Rupiah (approximately $29 billion) free nutrition program has increased fiscal burdens. Authorities hastily reduced the budget to 268 trillion Rupiah and are considering further cuts of about 40 trillion Rupiah, but the fallout continues. Concerns also linger over the MSCI index. MSCI has extended its review of Indonesia's emerging market status until November. If it determines that market accessibility improvements are insufficient, Indonesia could be downgraded from emerging to frontier market status. While it is premature to declare a repeat of the 1997-98 Asian financial crisis, the simultaneous occurrence of currency depreciation, capital outflow, fiscal instability, and questions about foreign reserves is raising alarm bells. Current Account Deficit and Foreign Capital Outflow Compound Issues The first vulnerability is the current account. According to Indonesia's central bank, the country recorded a current account deficit of $4 billion in the first quarter, equivalent to 1.09% of GDP. A current account deficit does not automatically signal a crisis. However, if it persists, reliance on external capital inflows will inevitably increase. The problem is that this external capital is becoming unstable. Continued foreign selling exacerbates stock market weakness and increases dollar demand, which in turn puts pressure on the Rupiah. Kim Geun-ah, an emerging markets strategist at Hana Securities, noted in a report on June 26 that the risk of a downgrade remains due to MSCI's extended review of Indonesia's status. She explained that foreign investors are likely to remain cautious until they see actual implementation of market accessibility improvements. Indonesia's foreign reserves stood at $144.9 billion at the end of May, down $1.3 billion from the previous month. This marks five consecutive months of decline since January. The central bank stated that this amount covers 5.6 months of imports and 5.5 months of government external debt repayments. While this exceeds the international standard of three months of imports, prolonged currency defense could accelerate the decline more than expected. Indonesia Raises Interest Rates and Cuts Free Meal Budget Indonesia's central bank has already entered defense mode. In its June monetary policy meeting, it raised the benchmark BI Rate by 0.25 percentage points to 5.75%. Interventions in both the spot and derivatives markets have also been intensified. To attract foreign portfolio capital, the interest rate structure for Rupiah-denominated securities has been adjusted. The government is also under fiscal pressure. The Korea International Trade Association's Jakarta office cited concerns over government fiscal discipline and policy credibility as factors behind the Rupiah's decline. There are growing fears that President Prabowo's expansion of free meals, subsidies, and social spending could lead to increased issuance of government bonds and borrowing, raising risk premiums across Indonesian financial assets. In fact, the Indonesian government has completely suspended its free meal program during the school vacation period from June 22 to July 13. The National Nutrition Agency and other relevant departments plan to provide free meals only during the school term moving forward. The government is also considering cutting the related budget by about 40 trillion Rupiah this year. While the program has not been abolished, the Rupiah's decline and fiscal burdens are beginning to constrain politically significant spending plans. It is not accurate to say that Indonesia is on the brink of a currency crisis. Its foreign reserves still exceed the minimum standards required by international financial institutions, and inflation remains under control. The central bank is also utilizing both interest rates and market interventions. However, the current situation exemplifies the typical "emerging market stress" scenario, characterized by a weak currency, current account deficit, foreign capital outflow, and concerns over fiscal credibility. This is why warnings about a potential crisis in Indonesia's economy are emerging. South Korea Faces Won Weakness, but Direct Comparison is Challenging South Korea is also grappling with a weakening won. On June 30, the won-dollar exchange rate closed at 1,549.4 won, up 4.2 won from the previous trading day, influenced by the yen's largest weakness in 40 years. At one point during the day, it surpassed 1,550 won for the first time in 16 trading days. The average won-dollar exchange rate for June was 1,526.59 won, marking the third highest level in history after January 1998's 1,701.5 won and February's 1,626.8 won during the financial crisis. It was also higher than the average exchange rate of 1,461.98 won during the global financial crisis in March 2009. While both the won and Rupiah are experiencing weakness in a strong dollar environment, South Korea differs from Indonesia in that it continues to generate foreign currency inflows rather than outflows. According to the Korea Customs Service, South Korea recorded a trade surplus of $36.1 billion in June, surpassing the $30 billion mark for the first time. This surplus was driven by a recovery in semiconductor exports and improvements in the goods balance. South Korea's foreign reserves also stood at $426.99 billion at the end of May, nearly three times that of Indonesia. Based solely on foreign reserves, the likelihood of South Korea facing a foreign currency shortage in the short term is limited. The challenge for South Korea lies in the insufficient supply of dollars in the domestic foreign exchange market. Domestic investors' overseas securities investments, the National Pension Service and financial institutions' expansion of foreign assets, and companies' preference for holding dollars are contributing to downward pressure on the won. Old M2 at 10% Level is Concerning; Excess Liquidity Must Be Monitored However, there are valid reasons for South Korea to take lessons from Indonesia's situation. Both countries are experiencing rapid increases in money supply compared to major economies. According to the Bank of Korea, the M2 money supply growth rate in April was 5.7% year-on-year. However, when considering the old M2, which includes income securities, the growth rate reached 10.3%. This rate is similar to or even steeper than Indonesia's money supply growth, which recorded annual M2 growth rates of 9.2% in April and 10.8% in May. Concerns about expanding money supply, fiscal spending, and capital outflows have led to shaken confidence in the Rupiah, which may also be a warning sign for the won. During the same period, the M2 growth rate in the United States was about 4.7% in April and about 5.6% in May, while Japan remained at around 2.5%. Russia's M2 growth rate was 12.3% in April and 13% in May, but this was largely due to wartime fiscal policies stemming from the Ukraine conflict. If excess liquidity increases dollar demand while the exchange rate approaches crisis levels, it could undermine confidence in the won. This is why South Korea should heed the lessons from the Rupiah's decline.* This article has been translated by AI. 2026-07-03 08:04:00 -
Korea's FX reserves edge up in June as ranking slips SEOUL, July 03 (AJP) -South Korea's foreign exchange reserves rose slightly in June, helped by a stronger dollar, but its global ranking slipped one notch, reflecting the cost of defending a stubbornly weak won, central bank data showed Friday. The country's foreign exchange reserves stood at $427.36 billion at the end of June, up $370 million from $426.99 billion in May, when the coffers shrank by $880 million, according to the Bank of Korea. The U.S.. dollar averaged at 1,491.26 won in May and 1,521.4 won, the highest in nearly three decades, to suggest continued pressure for policymakers to defend the local currency. The BOK said reserves edged higher as foreign currency deposits by financial institutions increased, offsetting market stabilization measures, including foreign exchange swap transactions with the National Pension Service. Securities accounted for the largest share of the reserves at $380.34 billion, or 89.0 percent of the total. Deposits stood at $22.27 billion, or 5.2 percent, while Special Drawing Rights totaled $15.64 billion, or 3.7 percent. Gold holdings were unchanged at $4.79 billion, while the country's reserve position at the International Monetary Fund stood at $4.31 billion. Compared with the previous month, deposits increased by $920 million, while securities declined by $330 million. SDR holdings and the IMF reserve position fell by $140 million and $90 million, respectively. South Korea's global ranking slipped to 13th as of the end of May, the latest month available for international comparison. The country ranked 12th a month earlier, but Singapore moved ahead with $430.1 billion in reserves, compared with South Korea's $427.0 billion at the end of May. China remained the world's largest holder of foreign exchange reserves with $3.4422 trillion, followed by Japan with $1.3059 trillion and Switzerland with $1.0767 trillion. Russia ranked fourth with $747.4 billion, while India came fifth with $686.3 billion. 2026-07-03 07:20:47 -
Korean football leadership faces civic complaint after World Cup shame SEOUL, July 02 (AJP) - The fallout from South Korea's group-stage exit at the 2026 FIFA World Cup is spreading beyond football, as the Korea Football Association faces renewed legal and political pressure over its leadership and decision-making. Hong Myung-bo, who resigned as head coach after South Korea failed to reach the round of 32, KFA President Chung Mong-gyu and former KFA technical director Lee Lim-saeng have been named in a complaint filed by the People's Livelihood Countermeasure Committee, a conservative civic group. The group said Thursday that it filed a complaint with the Seoul Metropolitan Police Agency against Chung, Lee and Hong on allegations including coercion, intimidation, obstruction of business and breach of trust. The group claimed that members of the KFA's National Teams Committee came under pressure from Chung and others during the national team coach selection process, leading to Hong's appointment. It also accused Hong of breach of trust, arguing that he failed to produce results despite receiving a high salary. The complaint remains an allegation by a civic group. Investigators or courts have not determined that any of the accusations are true. The same group filed a complaint against Chung and Lee in July 2024 over Hong's appointment. The related case was recently transferred from Jongno Police Station to the financial crime investigation unit of the Seoul Metropolitan Police Agency. The controversy over Hong's appointment dates back to July 2024. After dismissing Jurgen Klinsmann, the KFA spent months searching for a new coach before bringing back Hong, then manager of Ulsan HD. The appointment immediately drew criticism over fairness and transparency. In a 2024 audit, the Ministry of Culture, Sports and Tourism concluded that Lee had played a role in interviewing and recommending final candidates without proper authority under KFA rules. The ministry also said Hong's interview process differed from that of foreign candidates, with no written questions prepared in advance and no observers present. It further found that the KFA effectively reduced the role of its board to a formality by announcing Hong's appointment first and approving it later through written board consent. In November 2024, the ministry released the final results of its special audit and asked the KFA to impose heavy disciplinary measures, including suspension, against Chung and other officials. It also ordered the KFA to restart the national team coach appointment process in accordance with its rules. The KFA challenged the ministry's measures in court, but the Seoul Administrative Court ruled in April that the ministry's corrective demands were lawful. The World Cup result revived the appointment controversy. South Korea finished the group stage with one win and two losses, failed to qualify for the knockout round and saw Hong resign immediately after the elimination. The timing leaves South Korea facing another coaching vacuum before a major tournament. The 2027 AFC Asian Cup will be held in Saudi Arabia from Jan. 7 to Feb. 5 next year. The KFA now has about six months to appoint a new coach and rebuild the team's tactical direction. The pattern has become familiar. Shin Tae-yong left after the 2018 World Cup and Paulo Bento took over, while Bento left after the 2022 World Cup and Klinsmann was appointed. With Hong now gone, the national team must go through another reset before an Asian Cup cycle. Distrust toward the KFA is not limited to the senior national team job. In 2022, the association faced criticism over whether some high-profile former players, including members of South Korea's 2002 World Cup semifinal team, were receiving preferential access to the top-level P license coaching course. Chung's leadership has also been discussed against issues outside football, including public scrutiny over HDC Group's handling of the deadly Gwangju Hwajeong I-Park apartment collapse. The case was not directly related to the KFA. The latest complaint shows that the KFA controversy is moving beyond sports administration into the political arena. The People's Livelihood Countermeasure Committee has often been described in Korean media as a conservative civic group that files complaints on political and social issues. The move also came as Jin Jong-oh, an Olympic shooting champion and lawmaker from the conservative People Power Party, has been stepping up criticism of the KFA. The overlap in timing has given the World Cup fallout a sharper political edge, even as there is no confirmed link between the civic group's complaint and Jin's campaign. Jin called the exit a "predictable tragedy" and said he would launch a KFA whistleblower center. The government and ruling bloc are also responding. President Lee Jae Myung said South Korea's failure to reach the round of 32 reflected "a failure of organization and personnel." Lee added that results are obvious when loyalty and factional preference are placed above competence in choosing an "incapable commander." Lee also called on the Ministry of Culture, Sports and Tourism to identify the causes of the failure, prepare measures to prevent a recurrence and push ahead with sports administration reform. Chung has already indicated that he will step down after the World Cup. But Hong's resignation, civic complaints, police scrutiny, political pressure and the approaching Asian Cup are now converging into a wider demand for reform. The KFA is now left with the task of appointing a new coach while restoring transparency and accountability in its decision-making. 2026-07-02 17:31:06 -
Korea-Japan weak currency coupling tells different stories SEOUL, July 02 (AJP) - For South Korean policymakers battling a persistently weak won, the culprit is relatively straightforward: heavy foreign selling of Korean equities and an insatiable domestic appetite for dollar-denominated assets. The picture is more puzzling in Japan. Despite record foreign buying of Japanese stocks this year, the yen has continued to languish near multi-decade lows, defying the conventional expectation that capital inflows should support a country's currency. The apparent contradiction reflects a growing separation between equity investment and foreign-exchange positioning. Global investors can buy Japanese shares while simultaneously limiting or eliminating their exposure to the yen through futures, currency-hedged exchange-traded funds, forwards and swaps. According to Tokyo Stock Exchange data, overseas investors bought a net 10.94 trillion yen worth of Japanese cash equities in the first half of this year. That surpassed the 8.3 trillion yen of net purchases recorded during the first half of 2013, at the beginning of the Abenomics era. The inflows have been driven by the artificial intelligence investment boom and growing expectations that Japanese companies will continue improving corporate governance and capital efficiency. Global investors increasingly view Japan's semiconductor equipment, materials, components and data center-related companies as key beneficiaries of the AI supply chain. The shift has already reshaped Japan's corporate landscape. SoftBank Group has overtaken Toyota Motor in market capitalization on expectations for AI infrastructure growth, while Kioxia has also moved ahead of the automaker as investors bet on surging memory demand from AI data centers. Foreign buying has expanded well beyond semiconductor equipment makers such as Tokyo Electron to include electronic materials, optical fiber, power infrastructure and other AI-related businesses. Improving shareholder returns and stronger pressure on Japanese companies to enhance capital efficiency have further reinforced foreign demand. Yet buying Japanese stocks does not necessarily translate into buying the yen. Although cash equities on the Tokyo Stock Exchange are traded in yen, international investors can maintain exposure to Japanese stocks while largely avoiding currency risk. CME lists both yen- and dollar-denominated Nikkei 225 futures, while currency-hedged ETFs, forwards and swaps allow investors to capture Japanese equity returns without fully bearing the risk of further yen depreciation. As a result, capital can flow into Japanese equities without generating equivalent demand for the currency. That helps explain why record foreign purchases of Japanese shares have coincided with continued weakness in the yen. The incentive to hedge remains strong. As of July 2, the dollar traded around the 162-yen level, leaving many overseas investors reluctant to assume additional yen exposure while increasing allocations to Japanese stocks. Asset managers note that foreign investment in Japanese equities inherently creates currency risk. Selling yen through forward contracts or swaps allows them to neutralize that exposure while retaining their equity positions. The challenge is that public data offer little visibility into the scale of those hedging activities. Japan's Ministry of Finance securities investment statistics and Tokyo Stock Exchange investor trading data reveal how much foreigners buy or sell Japanese shares, but not whether they subsequently hedge their currency exposure. That makes the current market dynamic better understood as investors buying Japanese companies while keeping much of their currency exposure in dollars rather than yen. The currency's weakness also reflects structural macroeconomic factors, including the wide interest-rate differential between the United States and Japan and lingering skepticism over how quickly the Bank of Japan can normalize monetary policy. In other words, investors can be bullish on Japan's corporate earnings without necessarily being bullish on its currency. The divergence also has implications for South Korea. Foreign selling of Korean equities tends to generate immediate won-selling and dollar-buying pressure. By contrast, foreign purchases of Japanese stocks accompanied by currency hedges generate far less demand for the yen. In effect, global investors are rotating part of their exposure from Korea's semiconductor rally into Japan's AI supply chain while continuing to keep their currency preference tilted toward the U.S. dollar. 2026-07-02 16:40:39 -
World Cup 26: England survive DR Congo scare, U.S. advance SEOUL, July 02 (AJP) - England survived a major scare to reach the last 16 of the 2026 FIFA World Cup, while co-host United States advanced despite a red-card setback that left a bitter aftertaste to an otherwise hard-fought win. Belgium also moved on, but only after a dramatic late comeback against Senegal that raised as many questions as it answered. England came from behind to beat DR Congo 2-1 at Atlanta Stadium in Atlanta, Georgia, on Wednesday, in a match that kicked off at noon local time. DR Congo stunned England in the seventh minute, when Brian Cipenga capitalized on a defensive lapse and a misjudged bounce to give the African side an early lead. England struggled for long stretches after falling behind. DR Congo defended with discipline, goalkeeper Lionel Mpasi produced a series of saves and England were repeatedly forced into low-percentage attacks. But Harry Kane rescued England in the second half. The England captain equalized in the 75th minute with a close-range header, finally breaking through after sustained pressure. Kane struck again in the 86th minute. He received the ball near the edge of the area, turned across the front of the box and drove a powerful shot into the top corner to complete the comeback. The win sent England into a round-of-16 meeting with Mexico at Mexico City Stadium on July 5. That match is expected to be a difficult test. England will have only three days to adjust before facing a co-host in Mexico City, where altitude, crowd pressure and Mexico's current form could all become factors. Mexico has won all four of its matches in the tournament without conceding a goal. Belgium produced the day's most dramatic escape, beating Senegal 3-2 after extra time at Seattle Stadium in Seattle, Washington. The match kicked off at 1 p.m. local time. Senegal looked on course for the last 16 after taking a 2-0 lead. Habib Diarra opened the scoring in the 25th minute, finishing from close range after Ismaila Sarr's header came back off the post. Sarr doubled Senegal's lead in the 51st minute with a powerful finish after controlling a long pass from Moussa Niakhate. Belgium looked disjointed for much of the match, but Romelu Lukaku's halftime introduction eventually changed the game. Lukaku pulled one back in the closing minutes, turning in Thomas Meunier's low cross at the near post. Belgium then forced extra time when Youri Tielemans headed in Leandro Trossard's delivery, completing two goals in the final minutes of regulation. The turnaround was completed deep in extra time. After a video review, Lamine Camara was judged to have fouled Tielemans as the ball flashed across the face of goal. Tielemans converted the penalty in the 125th minute, sending Belgium through. Senegal had one last chance to respond, but Pape Sarr missed a free kick from a dangerous position in the final moments. Belgium showed it still has enough quality and experience to survive a knockout crisis, but the performance did little to ease concerns over its overall level. The Red Devils will face the United States in the round of 16 in Seattle on July 6. The U.S. beat Bosnia and Herzegovina 2-0 at San Francisco Bay Area Stadium in Santa Clara, California, in a match that kicked off at 5 p.m. local time. Folarin Balogun opened the scoring just before halftime, finishing a chaotic but important chance to give the co-hosts a 1-0 lead. But the match turned in the second half when Balogun was sent off after a video review. The striker caught Bosnia defender Tarik Muharemovic on the ankle with a high challenge, leaving the U.S. to play much of the second half with 10 men. The setback could have destabilized the home side. Instead, the U.S. found a second goal. Malik Tillman scored in the 82nd minute with a free kick from a dangerous central position, bending the ball past the wall and beyond goalkeeper Nikola Vasilj. Bosnia had a man advantage and 10 minutes of stoppage time, but failed to make sustained pressure count. The closest chances came late, when Bosnia fired two sharp efforts narrowly wide in the seventh and eighth minutes of added time. The U.S. also threatened on the counterattack despite being a man down, repeatedly finding space behind Bosnia's pushing back line. The win sent the Americans into the last 16, but Balogun's suspension now leaves them with a major attacking problem before facing Belgium. The U.S. showed grit, discipline and transition threat under pressure. But the red card means its next match will come without its starting striker, turning a strong home victory into a complicated step forward. 2026-07-02 14:02:15 -
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