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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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 -
Chipflation fears cool Korea's chip output SEOUL, June 30 (AJP) - South Korea's sharp pullback in chip output in May is adding to signs that the global memory crunch is no longer confined to data centers, with chipflation from soaring memory prices beginning to strain consumer spending and factory floors. Factory output fell 3.0 percent from the previous month in May, matching its steepest monthly drop in a year, according to the Ministry of Data and Statistics on Tuesday. The index of all-industry production, excluding agriculture, forestry and fisheries, slipped 0.3 percent from April, marking a second consecutive monthly decline. Semiconductor production tumbled 10.0 percent from the previous month, led by lower output of DRAM and NAND flash memory chips. The decline reflects an industry-wide shift in wafer lines rather than reduced demand. As memory manufacturers increasingly allocate capacity to higher-margin high-bandwidth memory (HBM) for hyperscale AI data centers and AI accelerators, supplies of conventional DRAM and NAND used in smartphones, personal computers and other consumer electronics have tightened sharply, pushing up component costs throughout the supply chain. Lee Doo-won, a senior ministry official, told reporters the decline reflected production adjustments related to delivery schedules and higher semiconductor prices, while stressing that underlying demand for chips remained strong. Other output data showed improvements. Retail sales edged up 0.1 percent in May after plunging 3.5 percent in April, while equipment investment slipped 0.1 percent. Services output rose 1.3 percent and construction completed rebounded 3.8 percent, helping cushion the overall decline in industrial activity. The tightening supply comes as South Korea's memory industry enjoys one of its strongest profit cycles on record. Samsung Electronics and SK hynix this week announced multi-trillion-won capital spending plans to expand advanced memory production. SK Group Chairman Chey Tae-won said global memory shortages are likely to persist as each new generation of artificial intelligence requires exponentially greater memory capacity, describing memory as the indispensable fuel powering the AI era. Micron Technology also signaled a structural shift in the industry during last week's record quarterly earnings release. The U.S. chipmaker said it has signed 16 Strategic Customer Agreements with major hyperscale customers representing roughly $22 billion in long-term commitments, arguing that such contracts would make its earnings more durable and predictable. The announcement underscored how AI infrastructure customers have become the industry's priority allocation. The shift is increasingly being felt by consumer electronics manufacturers. Research firm Gartner estimates combined DRAM and NAND prices could climb as much as 130 percent by the end of 2026, lifting PC prices by 17 percent and smartphone prices by 13 percent from 2025 levels. IDC has likewise warned that rising memory costs are forcing device makers to adjust pricing, product specifications and production plans. The impact has already begun to appear on store shelves. Apple last week raised prices for several MacBook and iPad models, citing sharply higher memory and storage costs driven by AI-related demand, while Xiaomi increased prices on several smartphone models in China earlier this year. Samsung Electronics has also raised prices for selected higher-capacity Galaxy smartphone models as memory costs and foreign exchange pressures mounted. Higher-storage devices are particularly vulnerable because memory accounts for a larger share of their bill of materials, making premium smartphones and PCs among the first products to reflect the industry's pricing power. Consumers have taken collective action amid the surge in prices. A proposed class-action lawsuit filed on June 25 in the U.S. District Court for the Northern District of California accuses Samsung Electronics, SK hynix and Micron Technology of conspiring to restrict supplies of conventional DDR3 and DDR4 memory while shifting production toward higher-margin HBM, allegedly inflating prices for mainstream memory products. While the plaintiffs allege unlawful coordination, most industry analysts attribute the shortage to explosive AI infrastructure demand, production conversion cycles and advanced packaging bottlenecks rather than coordinated supply restraint. Central banks increasingly worry that "chipflation" could keep core inflation elevated even after Gulf-related energy price pressures subside, as semiconductors become an increasingly significant input cost across the global economy. The May production figures suggest not a collapse in semiconductor demand, but a structural reallocation of manufacturing capacity toward AI infrastructure. As more memory output is directed to data centers, the costs are increasingly flowing through the broader economy—from factory floors to consumers purchasing everyday electronic devices. 2026-06-30 11:28:29 -
Korea's May factory output falls by steepest in a year on lower chip turnout SEOUL, June 30 (AJP) - South Korea’s industrial output fell for a second straight month in May as factory output dropped 3 percent on chip delivery adjustments, underscoring the weight of chipmaking on the economic performance, government data showed Tuesday. Manufacturing production fell 3.0 percent from the previous month, the steepest fall in a year, and dropped 0.9 percent from a year earlier. Output in the broader mining and manufacturing likewise fell 3.0 percent from April. The index of all industry production, excluding agriculture, forestry and fisheries, fell 0.3 percent from the previous month, extending a 0.4 percent decline in April, according to the Ministry of Data and Statistics. From a year earlier, overall production rose 2.3 percent, softening from 2.4 percent in April and 3.7 percent in March. Semiconductor production fell 10.0 percent due to lower output of flash memory and DRAM chips owing to delivery adjustments, rather than a fall in demand, the ministry said. Retail sales edged up 0.1 percent after falling 3.5 percent in April, while equipment investment slipped 0.1 percent. Services output rose 1.3 percent and construction completed rebounded 3.8 percent, helping cushion the broader decline. The cyclical component of the coincident composite index, which reflects current economic conditions, fell 0.3 point to 99.9, while the leading index rose 0.7 point to 104.8. 2026-06-30 09:17:53 -
KOSPI's volatility deepens on fragile foundation SEOUL, June 29 (AJP) - South Korea's stock market still looks spectacular despite its recent correction. Underneath, however, the rally is becoming increasingly narrow, speculative and volatile—three characteristics that help explain why the Korean won remains stuck near crisis-era levels despite the soaring benchmark. The latest evidence came Monday as the market's advance-decline ratio (ADR), a widely watched measure of market breadth, remained in oversold territory, highlighting how gains continue to be concentrated in a handful of heavyweight semiconductor stocks rather than spread across the broader market. According to the Korea Exchange (KRX), the KOSPI's ADR stood at 68.96 percent on Monday, while the KOSDAQ's measured 64.45 percent. Both improved from Thursday's readings of 59.79 percent and 55.04 percent, respectively, but remained below the 75 percent level widely regarded by technical analysts as an oversold threshold. The ADR compares the number of advancing and declining stocks over the previous 20 trading sessions. A reading below 100 percent means more stocks have fallen than risen. When the ratio remains weak while the headline index climbs, it typically signals that only a small number of large-cap stocks are carrying the market higher. That is precisely what has happened in Seoul. Samsung Electronics and SK hynix have dominated the rally as investors poured into AI-related memory-chip plays, while much of the rest of the market has struggled to keep pace. According to Korea Exchange data, the KOSPI's market capitalization climbed 44.36 percent between March 3 and last Thursday. During the same period, the combined market value of Samsung Electronics and SK hynix surged 113.24 percent. By comparison, the KOSPI 200 Ex-Top 10 Index—which excludes the market's ten largest companies—expanded by only 1.1 percent, underscoring how little of the rally has filtered into the broader market. Retail investors have become even more concentrated. Last month, regulators approved leveraged single-stock exchange-traded funds linked to Samsung Electronics and SK hynix, allowing Korean investors to trade domestically products that had previously been available mainly in overseas markets such as Hong Kong. The funds seek to deliver roughly twice the daily movement of each underlying stock, making them products primarily suited to short-term traders willing to accept significant volatility. The immediate policy objective appears to have been achieved. Financial authorities said Korean investors became net sellers of comparable Hong Kong-listed products after domestic ETFs were introduced, suggesting that some trading activity has returned to the local market. The broader investment picture, however, tells a different story. Rather than reducing overseas investment, Korean retail investors have shifted aggressively toward leveraged U.S. semiconductor products. According to Korea Securities Depository data, Korean investors purchased a net $1.76 billion of the Direxion Daily Semiconductor Bull 3X Shares (SOXL) during the second week of June alone. SOXL attracted more than eight times the net buying of KORU, the leveraged ETF tracking the Korean market. Over the past month, SOXL ranked as the single most-purchased U.S. security by Korean investors, with cumulative purchases reaching $5.39 billion. Other AI and semiconductor-related names—including Micron Technology, Marvell Technology, Nvidia, Arm, the iShares Semiconductor ETF and the Roundhill Memory ETF—also dominated overseas buying. The trend suggests that Korean retail investors are becoming more concentrated in semiconductor exposure rather than more diversified. Foreign investors, meanwhile, have continued heading in the opposite direction. According to Korea Exchange data, overseas investors have sold more than 40 trillion won worth of KOSPI shares during June, including more than 37 trillion won through Thursday and another 4.3 trillion won on Monday. That divergence has become increasingly important for the foreign-exchange market. Domestic investors may be sustaining the stock rally, but they cannot replace foreign capital when it comes to supporting the Korean won. At the same time, Korean households continue sending money abroad to purchase overseas semiconductor and AI products, reinforcing capital outflows even as local equities remain near record highs. The result is an unusual market dynamic: rising equity prices accompanied by a persistently weak currency. Monday's trading illustrated that uneven picture. The KOSPI slipped 0.2 percent to 8,394.65 as concerns over the U.S.-Iran standoff, Apple's planned price increases and questions over whether the memory cycle is approaching a peak weighed on large-cap semiconductor shares. The KOSDAQ, by contrast, surged 8.23 percent to 920.57 amid renewed expectations that the government will introduce measures to revive smaller growth companies. Even so, the KOSDAQ's advance-decline ratio remained below the oversold threshold, indicating that the rebound has yet to broaden meaningfully. The derivatives market painted an equally cautious picture. The VKOSPI—South Korea's equivalent of the VIX volatility index—closed at 96.94, indicating traders continue to expect unusually large market swings despite the relatively modest movement in headline indices. The next test will come with July earnings. Another round of blockbuster results from Samsung Electronics and SK hynix could extend the chip-led rally while making the market even more concentrated. Any disappointment, however, could expose just how dependent both the KOSPI and retail sentiment have become on a remarkably small group of AI-related stocks. For now, the headline index continues to suggest strength. The market beneath it tells a far more fragile story. 2026-06-29 17:30:42 -
BOK hunts for successor to lead its research institute SEOUL, June 29 (AJP) - The Bank of Korea (BOK) is scouting for an economist who will head its affiliated research institute, the central bank said on Monday. According to its open recruitment notice, the successful candidate, who will replace incumbent Lee Jae-won, a former professor at Seoul National University who took the role in 2023, will head the Economic Research Institute and be responsible for shaping the BOK's medium- to long-term research agenda as chief economist, regardless of whether the position is filled internally or externally. Lee is scheduled to leave the post at the end of September and return to his alma mater. Once hired, he or she will be responsible for setting the institute's overall direction, conducting research on monetary and financial issues, the financial system and macroeconomic developments, and managing domestic and international research exchanges. Applicants must hold a doctorate degree and have at least 15 years of work experience at financial agencies or other institutions including the BOK, universities, or international organizations. Expertise in central bank-related fields including monetary finance and macroeconomics would be a plus, according to the BOK. Applications for the three-year contract position, which can be extended by up to two years, should be submitted by July 10, with candidates undergoing document screening, background checks, interviews and a medical checkup. The successful candidate is expected to take up the post as early as October. 2026-06-29 15:51:55 -
Another early exit leaves Korean football searching for answers again SEOUL, June 29 (AJP) - "Sorry cannot make amends for the sense of betrayal for those who held onto hope until the very last minute," said 25-year-old Seoul resident Kim Sung-min. Like millions of South Koreans, Kim spent the weekend after Thursday's devastating defeat to South Africa watching the remaining World Cup matches, clinging to the slim possibility that results elsewhere might yet rescue Korea's campaign. "Our only hope was to see Son Heung-min play in what could have been his last World Cup," Kim said. "That was taken away from us." For South Koreans, the World Cup has always been an emotional contradiction. Expectations soar every four years, fuelled by memories of the country's extraordinary run to the semifinals on home soil in 2002, even when reality suggests otherwise. This time, even hope eventually ran out. The fallout from South Korea's group-stage exit at the 2026 FIFA World Cup is now spreading far beyond the resignation of head coach Hong Myung-bo. It has reopened uncomfortable questions about the Korea Football Association's governance, its long-term planning and, once again, the search for the right man to lead one of Asia's traditional football powers. Hong, one of the heroes of the 2002 team, offered to step down in Guadalajara on Sunday shortly after Korea's elimination became mathematically certain. By the time dawn broke in Seoul on Monday, the resignation was official. South Korea had begun the tournament brightly with a 2-1 comeback victory over Czechia. But successive 1-0 defeats to hosts Mexico and South Africa left the Taeguk Warriors stranded on three points. The decisive blow came against South Africa. A draw would have been enough to send Korea into the round of 32 under FIFA's expanded 48-team format. Instead, Hong's side delivered its most timid display of the tournament when everything was on the line. The consequences extended beyond elimination. FIFA's latest rankings dropped South Korea to 32nd, its lowest position since December 2021 and its first fall outside the world's top 30 in more than four years. For Hong, it marked an unwanted piece of history. It was his second World Cup campaign ending in a group-stage exit as national team manager, following the disappointing 2014 tournament in Brazil. Few Korean coaches have been given two opportunities to lead the national team at football's biggest stage. Hong failed to justify either. The contrast with neighboring Japan has only sharpened the disappointment. While Hajime Moriyasu has remained in charge since 2018, providing continuity through successive tournaments and a clear footballing identity, South Korea has lurched from one managerial reset to another, rarely allowing a coach enough time to build a lasting system. Hong returned to the national team in July 2024 following Jurgen Klinsmann's dismissal. His appointment was controversial from the outset, arguably attracting even greater scrutiny than Klinsmann's own hiring. At the time, the KFA defended its decision by pointing to Hong's tactical philosophy, his K League titles with Ulsan HD, his familiarity with both youth and senior national teams and his understanding of Korean football's structure. Lee Lim-saeng, then technical director, argued that Hong's work at Ulsan demonstrated the possession structure, pressing discipline and squad management required at international level. He also said Hong could provide continuity throughout the national team programme. Instead, the World Cup exposed precisely the qualities Korea was supposed to possess. The team never established tactical control. Its pressing lacked conviction, possession seldom translated into genuine scoring opportunities and, when matches drifted away, there appeared to be neither an alternative plan nor the confidence to execute one. Against South Africa, Korea struggled to alter its tempo, reshape its attack or impose itself on a match that effectively became a knockout game. That failure has inevitably revived comparisons with Jesse Marsch, one of the foreign candidates Korea considered before choosing Hong. Marsch eventually took charge of Canada, guiding an injury-hit squad into the knockout rounds after defeating South Africa 1-0 with a stoppage-time winner. Korea, despite fielding one of the strongest generations of overseas-based players in its history, could not overcome the same opponent. The comparison is an uncomfortable reminder of the decision the KFA ultimately made. The appointment process itself remains under scrutiny. In its 2024 audit, the Ministry of Culture, Sports and Tourism concluded that the KFA had violated its own procedures when selecting Hong. The ministry found that Lee Lim-saeng, who was not a member of the National Teams Committee, lacked the authority to recommend the final candidate and that the evaluation process had not operated as intended. Following the resignation of committee chairman Chung Hae-sung during the search, Lee conducted meetings with foreign candidates before personally visiting Hong to offer him the job. According to the ministry, Hong's meeting differed from those held with other candidates and did not follow the same interview process or procedural safeguards. The controversy did not end there. Police opened an investigation following complaints over the appointment process, while a Seoul court later acknowledged procedural problems surrounding both the Hong and Klinsmann appointments. Those governance questions have returned with greater force now that the sporting results have collapsed alongside them. Criticism has also broadened to the KFA's wider administration, with some questioning decisions ranging from national team logistics to the construction of the new National Football Centre in Cheonan, roughly two hours from Incheon International Airport depending on traffic. Attention has once again turned to KFA President Chung Mong-gyu, who has led Korean football since 2013 and indicated before the tournament that he intended to step down afterward. Many within Korean football now argue that replacing another coach will not be enough. What the federation requires is structural reform after more than a decade of recurring managerial upheaval, inconsistent planning and mounting public distrust. President Lee Jae Myung added political weight to the debate following Korea's elimination, saying the tournament demonstrated what happens when "an incompetent person is placed in charge." He instructed the Ministry of Culture, Sports and Tourism to examine the causes of the failure and recommend measures to prevent a repeat. The national team now faces another familiar crossroads. With less than a year remaining before the AFC Asian Cup in Saudi Arabia, Korea once again finds itself searching for a new head coach while debating the direction of its football administration. It is a cycle that has repeated itself after the departures of Shin Tae-yong following the 2018 World Cup, Paulo Bento after Qatar in 2022 and now Hong after North America. For supporters, however, the deepest frustration lies elsewhere. It is not simply that Korea failed to advance. It is that, despite possessing arguably the finest generation of footballers in its history — led by Son Heung-min, Kim Min-jae, Lee Kang-in, Hwang Hee-chan and Hwang In-beom — the national team once again looked less than the sum of its parts. Another World Cup has ended. Another coach has fallen. And Korean football is left asking the same questions it has been asking for more than a decade. 2026-06-29 14:03:54