Journalist

Kim Yeon-jae
  • Tech slump drags Asian markets lower as investors eye BOJ
    Tech slump drags Asian markets lower as investors eye BOJ SEOUL, December 18 (AJP) - Asian equity markets ended broadly lower on Thursday as fallout from an “Oracle shock” weighed on technology shares and investors stayed cautious ahead of the Bank of Japan’s (BOJ) interest rate decision. Most major benchmarks declined, though mainland China’s Shanghai Composite showed relative resilience, appearing largely insulated from weakness in U.S. technology stocks. South Korea’s benchmark KOSPI fell 1.53 percent to 3,994.51, slipping back below the psychologically important 4,000 level and posting one of the steepest losses among major Asian markets, alongside the Shenzhen Component. Foreign investors were heavy sellers, offloading 356.3 billion won ($241 million), while institutional investors sold 101.2 billion won. Retail investors bucked the trend, buying a net 424.2 billion won. The Korean won extended its weakness, trading at 1,478.7 per dollar at 4:10 p.m. local time, down 0.2 won from the previous session. The currency remains under pressure from sustained foreign outflows and expectations of a BOJ rate hike. Heavyweight stocks outperformed the broader market. Samsung Electronics slipped 0.28 percent to 107,600 won. Losses linked to Oracle-related sentiment were partly offset by strong earnings from Micron Technology, which lifted the outlook for the memory chip sector. SK hynix edged up to 552,000 won but pared earlier gains after hitting a session high of 563,000 won. The secondary battery sector suffered sharp losses after Ford, a key customer for South Korean manufacturers, scrapped contract plans and dissolved a joint venture, citing the electric vehicle market “chasm.” LG Energy Solution plunged 8.9 percent to 378,500 won, Samsung SDI fell 6.1 percent to 277,000 won, and SK Innovation, the parent of SK On, dropped 5.16 percent to 104,800 won. Materials supplier EcoPro Materials slid 6.35 percent. Korea Zinc sank 5.7 percent to 1,306,000 won amid controversy surrounding its joint venture with the U.S. Department of Defense. Investor sentiment deteriorated following reports that warrants issued during the process carried an exercise price of just 1 cent, while the U.S. side is set to receive more than $100 million a year in fees. In Japan, the Nikkei 225 dropped 1.03 percent to 49,001.5, pressured by technology weakness and caution ahead of the BOJ policy meeting. Semiconductor-related stocks led declines, with Advantest falling 3.32 percent to 18,805 yen ($120.6), Tokyo Electron down 3.22 percent, and Ibiden sliding 4.33 percent. Automakers showed mixed performance. Honda fell 2.53 percent to 1,543 yen following news of a brake-related recall in the U.S., while Toyota rose 0.42 percent to 3,363 yen, benefiting from apparent rotation within the sector. Financial stocks posted more moderate losses, with Mitsubishi UFJ Financial Group and Mizuho Financial Group down about 1 percent. Taiwan’s TAIEX was relatively steady, slipping 0.21 percent to 27,468.53. TSMC ended flat at 1,430 Taiwan dollars ($45.3), while MediaTek and Hon Hai Precision Industry (Foxconn) recorded modest declines. Mainland Chinese markets were mixed. The Shanghai Composite rose 0.16 percent to 3,876.37, while Hong Kong’s Hang Seng Index edged down 0.25 percent. Technology shares underperformed, with the Shenzhen Component falling 1.29 percent. Battery maker CATL dropped 2.98 percent and automaker BYD slid 1.76 percent. 2025-12-18 16:47:20
  • Asian markets subdued by Wall Street slide, BOJ rate anticipation
    Asian markets subdued by Wall Street slide, BOJ rate anticipation SEOUL, December 18 (AJP) - Asian markets opened subdued on Thursday, taking cues from two key drivers — an overnight sell-off on Wall Street and anticipation ahead of the Bank of Japan’s rate decision. In New York, renewed concerns over an “AI bubble” resurfaced after a major financier reportedly withdrew from an Oracle-led AI data-center project. The gloom was partially offset by Micron Technology’s strong earnings and upbeat guidance, which sent its shares surging more than 7 percent in after-hours trading and provided modest relief to chip-heavy markets in South Korea and Taiwan. In Seoul, the benchmark KOSPI fell 1.3 percent to 4,004 as of 10:30 a.m., with institutional and foreign investors leading the sell-off. Foreigners offloaded a net 71.5 billion won ($48.5 million), while institutions sold 17 billion won. Retail investors stepped in to buy the dip, net purchasing 71.5 billion won. The Korean won weakened to 1,475.1 per U.S. dollar, down 3.4 won from the previous session. Market sentiment remained fragile after the currency briefly breached the 1,480 level a day earlier, prompting an emergency morning meeting among finance ministry, financial regulator and central bank officials. Samsung Electronics slipped 0.9 percent to 107,000 won, reflecting spillover concerns from the Oracle-related AI pullback. SK hynix, however, rose 1.8 percent to 560,000 won, buoyed by Micron’s strong results. The secondary battery sector came under heavy pressure. LG Energy Solution plunged 6 percent to 390,500 won following news of the termination of a battery supply contract with Ford Motor. SK Innovation, the largest shareholder of SK On, fell 3.3 percent to 107,000 won amid reports that its U.S. joint venture with Ford is being dissolved. Samsung SDI dropped 4.6 percent to 282,000 won, while materials producer EcoPro Materials slid 4 percent to 57,500 won. The tech-heavy KOSDAQ declined 0.5 percent to 905, with the psychologically important 900 level again under threat. Foreign selling of 45 billion won weighed on the index, particularly EcoPro-related stocks. EcoPro fell 3.2 percent to 100,000 won, while EcoPro BM sank 4.7 percent to 158,000 won. In contrast, recent market debutants remained resilient. Nara Space Technology jumped 14 percent to 30,800 won, extending its post-listing rally. Aimed Bio and Alteogen each edged up about 2 percent, with Alteogen supported by expectations surrounding its planned transfer to the KOSPI in 2026. Japan’s Nikkei 225 fell 0.75 percent to 49,145, tracking the tech-led decline in U.S. equities. Among major stocks, Toyota Motor edged up 0.24 percent to 3,357 yen ($21.6), while Honda Motor slid 1.7 percent to 1,556 yen. The divergence followed reports that U.S. safety regulators ordered a recall of about 70,000 units of Honda’s Acura ILX due to potential software defects, prompting some rotation into Toyota. Semiconductor shares in Tokyo faced what traders described as a “cold winter” sentiment. Advantest fell 3.15 percent, Tokyo Electron dropped 2.7 percent, and Ibiden declined 2 percent. Taiwan’s TAIEX posted a milder decline, slipping 0.3 percent to 27,448. TSMC edged down 0.35 percent to 1,425 Taiwan dollars ($45.1), while MediaTek rose 0.35 percent to 1,435 Taiwan dollars. Mainland China and Hong Kong markets also opened weaker. The Shanghai Composite fell a modest 0.25 percent, but tech-heavy indices underperformed, with the Shenzhen Component down 0.95 percent and the Hang Seng Index sliding 0.75 percent to 25,277. 2025-12-18 11:13:39
  • Asian markets mixed as investors weigh U.S. jobs data, await ECB and BOJ decisions
    Asian markets mixed as investors weigh U.S. jobs data, await ECB and BOJ decisions SEOUL, December 17 (AJP) - Asian equity markets traded mixed in early Tuesday session, digesting overnight U.S. employment data while bracing for imminent rate decisions in Europe and Japan. In the United States, nonfarm payrolls rose more than expected, but the unemployment rate also came in higher than forecasts, adding uncertainty over the strength and trajectory of the U.S. economy. Investors are now focused on the European Central Bank’s policy decision on Thursday and the Bank of Japan’s meeting on Friday, where a rate hike is widely anticipated. South Korea’s currency remained fragile, with the won weakening 3 won to 1,477.6 per dollar as of 11 a.m. The KOSPI rebounded 0.65 percent to 4,025 as of 11 a.m., staging a technical recovery after plunging more than 2 percent in the previous session. Retail investors led the rebound with net purchases of 143.5 billion won ($97.2 million), joined by institutions buying 104.2 billion won. Foreign investors, however, continued to sell, unloading 253 billion won worth of shares. Samsung Electronics rose 2.14 percent to 105,000 won, while SK hynix gained 1.5 percent to 538,000 won. The market’s two largest stocks benefited from a technical rebound in AI-related semiconductor shares on Wall Street, including Broadcom. Investor attention is also building ahead of Micron Technology’s earnings release after the Nasdaq close on Tuesday. Micron is the world’s third-largest DRAM producer. Vehicle software-related stocks remained under pressure. Hyundai AutoEver slid 3.9 percent to 270,000 won following reports of Tesla’s progress in Robotaxi development. Hyundai Motor lagged the broader market rebound, rising just 0.2 percent to 286,000 won. Nuclear energy stocks showed mixed performance despite news of a 5.6 trillion won contract to supply a nuclear steam supply system for the Dukovany nuclear power plant in the Czech Republic. Korea Electric Power Corp., the project’s lead contractor, jumped 3.2 percent to 52,000 won. In contrast, equipment supplier Doosan Enerbility fell 2.2 percent to 75,600 won after being designated an “investment warning stock.” The tech-heavy KOSDAQ traded nearly flat, edging up 0.2 percent to 918. Despite a steady stream of new IPOs, their impact on lifting the overall index has remained limited. Nara Space Technology, a satellite manufacturer and data solutions provider, surged 164 percent from its IPO price of 16,500 won to 43,300 won on its debut. The sharp rise reflects growing investor interest in the private space industry. In Japan, the Nikkei 225 was little changed at 49,400. Semiconductor-related stocks tracked gains in U.S. peers, with Advantest rising 1.7 percent to 19,500 yen ($126.1) and Ibiden up 1.8 percent to 11,600 yen. Export-oriented stocks were largely subdued ahead of the BOJ’s expected rate hike. Toyota was flat at 3,330 yen, while Honda slipped 0.75 percent to 1,573 yen. Taiwan’s TAIEX climbed 0.56 percent to 27,691.5. TSMC rose 0.35 percent to 1,440 Taiwan dollars ($45.7), while MediaTek advanced 1.75 percent to 1,445. MediaTek has extended its rally this week on rising smartphone sales in China and positive benchmark reviews of its latest chipset. Chinese markets remained cautious. Indices tied to traditional industries hovered near previous closing levels, with the Shanghai Composite at 3,823 and Hong Kong’s Hang Seng at 25,245. The tech-heavy Shenzhen Component outperformed, rising 0.4 percent to 12,968. 2025-12-17 11:23:45
  • Member-heavy KOSDAQ limps as KOSPI flies on thin venture financing
    Member-heavy KOSDAQ limps as KOSPI flies on thin venture financing SEOUL, December 16 (AJP) - There is a Korean saying that the younger is better than the elder. That adage hardly applies to the KOSDAQ, which has struggled to outperform its bigger sibling, the KOSPI, even with a steady stream of government stimulus measures. The “younger brother” showed a brief revival in the final two months of the year as foreign investors returned. Overseas investors bought a net 128.7 billion won ($93 million) worth of KOSDAQ shares as of last week — a sharp reversal from the 1.4 trillion won in net selling recorded between January and November. Daily turnover averaged more than 1 trillion won, double the level seen in August. Even so, gains remained modest. The KOSDAQ rose 1.8 percent over the period, compared with a 4.3 percent increase in the KOSPI. Last month, the pattern briefly reversed, with the KOSDAQ gaining 1.4 percent while the KOSPI fell 4 percent. Longer-term charts tell a less flattering story. The KOSDAQ has been largely sidelined in Korea’s broader exit-strategy debate tied to the so-called “Korea discount.” As of Monday, the KOSDAQ was up 36.7 percent this year — respectable, but far behind the KOSPI’s 70.5 percent surge. The gap widens further over five years: the KOSDAQ has gained just 9 percent, versus a roughly 50 percent rise for the KOSPI. It is not that authorities have done little. In the latest policy push, the government is reportedly considering separating the KOSDAQ from the Korea Exchange (KRX) to establish it as an independent entity, modeled after the U.S. Nasdaq. Yet despite aggressive support measures, companies continue to leave the market. The KOSDAQ’s deeper problem is its failure to persuade successful firms to stay once they scale up. On Dec. 8, shareholders of Alteogen — the KOSDAQ’s largest biotech by market capitalization — approved a plan to move its listing to the KOSPI. Alteogen’s market value stands at around 25 trillion won, accounting for roughly 5 percent of the KOSDAQ’s total capitalization. It is far from the first high-profile departure. Naver voluntarily delisted from the KOSDAQ to move to the KOSPI in 2008, followed by Kakao in 2017 and Celltrion in 2018. Size matters As of Tuesday, 1,822 companies were listed on the KOSDAQ, nearly double the 958 firms on the KOSPI. Trading volume on the KOSDAQ is roughly three times higher, yet trading value tells a different story: KOSPI transactions totaled 16.3 trillion won, surpassing the KOSDAQ’s 13 trillion won. Park Soon-jae, chief executive of Alteogen, said the move is expected to “increase the stockholding ratio of institutional investors,” noting that both domestic and foreign institutions tend to favor KOSPI-listed firms. Confidence problem The Federation of Korean Industries (FKI) points to the high share of “marginal” or “zombie” companies — firms unable to cover even their interest expenses — as a core weakness. As of 2024, such companies accounted for 23.7 percent of KOSDAQ listings, more than double the roughly 10 percent share on the KOSPI. Still, new listings continue to appear almost daily this month, highlighting the lack of financing alternatives for startups and early-stage companies. A survey released last Friday by the Korea Venture Business Association (KOVA) found that 85 percent of unlisted venture firms planning an IPO hoped to list on the KOSDAQ rather than the KOSPI. Respondents agreed that fundamental structural reform is needed to revitalize the market. Many emphasized prioritizing the “technology special listing” system, under which technological capability and growth potential are the main criteria. While more than a third of KOSDAQ-listed firms already use the system, standards remain ambiguous, with marketability sometimes outweighing technological merit. Market discipline was another recurring theme. About 84 percent of surveyed companies said the KOSDAQ could only be revitalized by expelling insolvent firms, including zombie companies, arguing that financial soundness is as critical as technological strength in restoring investor confidence. “The KOSDAQ can only function as a proper securities market when its identity is clearly defined and its soundness is strengthened,” said Lee Jung-min, secretary-general of KOVA, adding that the government’s “KOSDAQ 1,000” goal would only be achievable with a clear, national-level roadmap. 2025-12-16 17:53:06
  • South Korea leads Asian market losses ahead of BOJ, ECB meetings
    South Korea leads Asian market losses ahead of BOJ, ECB meetings SEOUL, December 16 (AJP) - Asian stock markets closed lower on Tuesday as skepticism over artificial intelligence valuations spread from Wall Street and investors braced for key interest rate decisions from the Bank of Japan (BOJ) and the European Central Bank (ECB). South Korean equities posted the steepest losses in the region. The benchmark KOSPI index tumbled 2.24 percent to 3,999.13, while the tech-heavy KOSDAQ fell 2.42 percent to 916.11. Foreign investors were net sellers of 1.4 trillion won ($95 million) across the two markets. The Korean won strengthened for a second session, ending at 1,475.4 per dollar, up 4.6 won from the previous close. Government bond yields edged lower, with the three-year yield down 0.1 basis point to 2.999 percent and the 10-year yield falling 1.2 basis points to 3.313 percent. Losses were broad-based across large-cap stocks. Samsung Electronics, which had recently drawn buying interest ahead of its year-end dividend, fell 1.91 percent to 102,800 won. Chipmaker SK hynix dropped 4.33 percent to 530,000 won, marking one of its worst weekly performances this year. Shares in Hyundai Motor Group companies also declined. Hyundai Engineering & Construction slid 4.92 percent to 69,500 won following negative news related to business partners. Hyundai Motor fell 2.56 percent to 286,000 won, weighed down by concerns over its autonomous driving competitiveness and the fallout from its affiliate. Secondary battery-related stocks led the selloff after reports that SK On and Ford plan to dissolve their joint venture, BlueOval SK, amid a slowdown in electric vehicle demand. LG Energy Solution plunged 5.54 percent to 418,000 won, while Samsung SDI lost 3.14 percent to 293,500 won. Cathode material maker Posco Future M tumbled 7.49 percent to 210,000 won, and SK Innovation fell 2.75 percent to 109,800 won. Biotechnology stocks provided rare pockets of strength on expectations that earnings may exceed forecasts. Samsung Biologics rose 1.02 percent to 1,790,000 won, while Samsung Episholding added 0.42 percent to 712,000 won. In the KOSDAQ market, battery-related names were again among the biggest laggards, with EcoPro sliding 8.08 percent to 101,300 won. Robot-related stocks also weakened, as Rainbow Robotics fell 3.87 percent to 460,000 won. Biotech firm Aimed Bio gained 2.7 percent to 72,400 won. Elsewhere in Asia, Japan’s Nikkei 225 fell 1.56 percent to 49,383.29. Battery and robotics stocks underperformed, with Panasonic Holdings down 4.67 percent to 2,054 yen ($13.26) and Fanuc sliding 6.04 percent to 5,708 yen. Taiwan’s TAIEX dropped 1.19 percent to 27,536.66. Chip heavyweight TSMC declined 1.03 percent to 1,435 Taiwan dollars ($45.59), while Hon Hai Precision Industry (Foxconn) fell 1.58 percent to 218 Taiwan dollars. MediaTek closed flat, helping limit broader losses. Mainland Chinese shares also ended lower. The Shanghai Composite Index fell 1.11 percent to 3,824.81, with investors wary of a potential unwind in yen carry trades ahead of the BOJ’s policy announcement later this month. The Shenzhen Component dropped 1.51 percent to 12,914.67, while Hong Kong’s Hang Seng Index was down 1.7 percent at 25,195 as of late afternoon. 2025-12-16 17:02:39
  • Asian markets weaken early Tuesday as AI jitters and rate decisions loom
    Asian markets weaken early Tuesday as AI jitters and rate decisions loom SEOUL, December 16 (AJP) - Asian equities opened Tuesday broadly lower, tracking subdued U.S. market sentiment as lingering concerns over AI valuations and looming interest-rate decisions by European and Japanese central banks weighed on risk appetite. In Seoul, the KOSPI fell 1.5 percent to 4,028 as of 10:30 a.m., extending losses for a second straight session after dropping 1.8 percent on Monday. Institutional investors were net sellers of 223 billion won ($151 million), while foreign investors sold 150 billion won, doubling down on bets that the market’s recent rally is losing momentum. Retail investors, however, continued to buy—net purchasing 386 billion won—as they positioned for a potential year-end “Santa rally,” mirroring the previous day’s flow. The Korean won traded at 1,471.3 per dollar as of 10 a.m., up 0.5 won from the prior session. The modest appreciation was attributed to foreign selling in local equities and the extension of the foreign-exchange swap arrangement between the central bank and the National Pension Service. Large caps mixed as investors rotate to defensives Market heavyweights showed divergent moves. SK hynix slid 1.3 percent to 545,000 won, breaking below the 550,000-won threshold, while Samsung Electronics was flat at 104,500 won, suggesting a rotation toward relatively defensive blue-chip names amid rising uncertainty. Hyundai Motor fell 2 percent to 287,500 won, extending Monday’s losses, as reports suggesting its autonomous-driving technology lags rivals such as Tesla, BYD and GM by as much as five years continued to pressure sentiment. Hyundai Engineering & Construction plunged 5.35 percent to 69,300 won for a second consecutive day, amid concerns that its energy and AI campus project with Fermi America may collapse. The Hyundai conglomerate is also expected to announce a sweeping C-suite reshuffle this week. Hyundai Mobis, the de facto holding company of Hyundai Motor Group, dropped 1.5 percent to 359,000 won, tracking the weak performance of its affiliates. Korea Zinc erased the previous session’s gains, plunging 11.6 percent to 1.4 million won. While the company confirmed plans to build a 2 trillion won smelter in the United States, investor sentiment cooled after it emerged that the U.S. government’s direct equity contribution would amount to only about 2 percent of total project costs. Biotech shares bucked the broader weakness for a second day. Samsung Biologics rose 1.1 percent to 1.79 million won, extending gains after its affiliate Samsung EpiHolding surged a day earlier. KOSDAQ underperforms, robots retreat The tech-heavy KOSDAQ fell more sharply, down 1.7 percent to 923. Foreign investors sold 246.3 billion won, while institutions offloaded 63.6 billion won. Retail investors stepped in with net purchases of 340 billion won. Robot-related stocks led declines. Rainbow Robotics dropped 3.9 percent to 459,000 won, while Robotis slid 5 percent to 295,000 won. Biotech names also struggled to maintain momentum. Alteogen, which recently decided to transfer its listing to the KOSPI, fell 2 percent to 425,000 won, while ABL Bio, after surging Monday, slipped 1.9 percent to 192,000 won. Japan, Taiwan, China follow regional downtrend Japan’s Nikkei 225 fell 0.95 percent to 49,695 as of 10 a.m., with semiconductor-related stocks again under pressure. Ibiden declined 1.9 percent to 11,600 yen ($74.8), and Kioxia Holdings dropped 2.75 percent to 8,945 yen. Advantest was flat at 19,470 yen, as some investors saw signs of a near-term bottom. Toyota edged down 0.2 percent to 3,344 yen, with losses moderating as investors gravitated toward stable blue-chip names—echoing patterns seen in Seoul. Taiwan’s TAIEX fell 0.6 percent to 27,691. TSMC slipped 1 percent to 1,435 Taiwan dollars ($45.7), while MediaTek rose 1.8 percent to 1,445 Taiwan dollars, supported by stronger demand from China and favorable reviews of its new Dimensity 9500 chipset. Mainland Chinese markets were subdued. The Shanghai Composite dipped 0.4 percent to 3,850, while the Shenzhen Component fell 0.3 percent to 13,072. Hong Kong’s Hang Seng Index declined 0.7 percent to 25,450, a milder drop than Monday despite its closer correlation with U.S. markets. 2025-12-16 11:20:36
  • Seoul FX authorities extend $65 bn currency swap with NPS
    Seoul FX authorities extend $65 bn currency swap with NPS SEOUL, December 16 (AJP) -South Korea’s foreign exchange authorities have agreed to extend a $65 billion currency swap arrangement with the National Pension Service (NPS) through the end of 2026, as policymakers step up efforts to stabilize the won amid rising overseas investment flows and renewed market volatility. The Ministry of Economy and Finance and the Bank of Korea (BOK) in a joint statement on Monday said that the extension will help "absorb the pension fund’s demand for U.S. dollars during periods of market stress," easing pressure on the spot foreign exchange market. The arrangement with the central bank, which had been due to expire at the end of this year, allows the NPS to obtain dollars via swap transactions rather than buying them directly in the open market when rebalancing or expanding its overseas portfolio. Although foreign exchange reserves will temporarily decline by the size of the swap during the contract period, authorities stressed that the funds will be fully restored at maturity, making the impact on reserves transitory. Authorities added that hedging foreign assets through swap transactions would help the NPS mitigate exchange-rate volatility risks associated with its overseas investments, while also supporting the pension fund’s long-term returns. The NPS swap facility was first introduced in September 2022 with a $10 billion ceiling, at a time when the won was under heavy pressure amid aggressive U.S. rate hikes. Since then, the limit has been expanded steadily as overseas investment by Korea’s largest institutional investor has grown. The cap was raised to $35 billion in April 2023, $50 billion in June 2024, and further to $65 billion in December 2024, underscoring the authorities’ increasing reliance on the mechanism as a structural FX stabilizer rather than a temporary crisis tool. Policymakers have said the won’s recent weakness has been driven largely by increased U.S. equity investments by domestic investors and the NPS, alongside profit-taking by foreign investors following strong gains in the Korean stock market. The won has neared 1,500 won in recent weeks, prompting authorities to deploy a range of measures to safeguard financial stability. The currency reacted immediately to news of the extension. The dollar fell 7 won to 1,470.50 won late Monday, though officials cautioned that FX risks remain elevated given global monetary uncertainty and persistent capital outflows. Last month, the finance ministry, the BOK, the NPS and the Ministry of Health and Welfare, which oversees the pension fund, established a four-way consultation body to coordinate responses to foreign exchange market developments. The extension signals that Seoul is prepared to use institutional coordination rather than direct market intervention as its first line of defense against currency instability, as capital flows continue to test the resilience of Korea’s open financial system. NPS, the world's third largest institutional player, manages 1,100 trillion won ($750 billion), with more than 40 percent invested overseas, spanning U.S. equities, global bonds, private equity and infrastructure. These allocations require large and recurring purchases of foreign currency—primarily U.S. dollars—particularly during periods of portfolio rebalancing or strong global equity inflows. 2025-12-16 08:06:12
  • Korean won at record low signals monetary policy failure
    Korean won at record low signals monetary policy failure SEOUL, December 15 (AJP) - The Korean won hovering near its weakest level on record is set to ripple across the economy, from higher inflation and capital outflows to a deepening discount on Korean assets and companies. The dollar closed Monday in Seoul at 1,472.2 won, down 5.30 won, as the yen strengthened broadly on expectations of a rate hike in Japan later this week. The modest pullback offered only fleeting relief for policymakers. Authorities were alarmed enough to convene an emergency meeting on Sunday, attended by the finance minister, central bank governor, financial regulators and senior officials from the presidential office, welfare ministry and industry ministry, after the dollar approached 1,480 won in over-the-counter trading. Despite the brief rebound, the won’s slide has reached historic proportions. The average dollar-won exchange rate for the year through Dec. 14, 2025, stands at 1,420 won — surpassing the previous record of 1,394.7 set in 1998, when South Korea was under an International Monetary Fund bailout. The longer-term trend is equally troubling. The won has weakened steadily since 2021, initially reflecting ultra-loose global liquidity during the pandemic, followed by aggressive post-pandemic monetary tightening. What stands out now is a clear decoupling. The won is falling sharply against the backdrop of dollar softening and rate cuts in the U.S. So far this month, the won has lost 0.7 percent against the dollar, while most major currencies have gained. Economists increasingly point to excess liquidity as the root cause. Korea’s policy normalization has proceeded more slowly and cautiously than elsewhere, largely out of concern over household debt levels, among the highest in the world. “If I had to summarize the reason for the exchange rate rise in one word, it would be ‘liquidity,’” said Kim Gwang-seok, director of economic research at the Korea Institute for Industrial Economics & Trade. Korea’s broad money supply (M2) grew 8.5 percent year over the year as of September, according to the Bank of Korea. Even excluding exchange-traded funds, growth stood at 6.3 percent — up to three times faster than the United States’ 4.6 percent and Japan’s 1.8 percent. An oversupply of won inevitably erodes its value. “When M2 expands, inflation rises, household debt swells, and exchange-rate instability accelerates as the supply of won increases,” said Moon Hong-cheol, an analyst at DB Securities. The liquidity glut has spilled across borders. Korean nationals’ overseas equity purchases surged to $18 billion in October — six times the $2.93 billion foreign investors put into Korean stocks — according to Bank of Korea data. Flush with cash, Koreans are choosing foreign assets over domestic ones, a telling verdict on confidence in the won. Large-scale capital commitments abroad are also adding pressure. The $350 billion in promised investments in the United States, agreed during bilateral trade negotiations, are widely cited as another structural source of net won outflows. Unlike Japan, which benefits from a standing currency swap line with the U.S., South Korea has limited buffers, relying on foreign-currency bond issuance or returns from overseas assets — constraints that weigh on its dollar liquidity. A weak won quickly feeds into prices. Import costs are rising even as global energy prices fall. South Korea’s import price index rose 2.6 percent on month and 2.2 percent on year in November, the steepest monthly increase since April last year. This came despite Dubai crude averaging $64.47 per barrel, down from $65 in October, underscoring how exchange rates — not commodity prices — are driving inflationary pressure. Beyond households, prolonged currency weakness threatens longer-term damage to Korean Inc. Cross-border mergers and acquisitions reached nearly $3 billion as of September, up 54 percent on year, accounting for 13 percent of the $20.65 billion in foreign direct investment pledged by the third quarter, according to the Ministry of Trade, Industry and Energy. FDI inflows jumped 36.5 percent to $3.07 billion as a won that averaged 4 percent weaker than last year’s level effectively discounted Korean assets. High-profile targets such as Lotte Rental and IGIS Asset Management have drawn aggressive foreign interest — a grim reminder of past episodes when distressed Korean companies were snapped up during IMF crisis in what felt like fire sales. Underlying growth also weighs over the currency prospects. “Semiconductor exports have increased, but the domestic economy has failed to emerge from its slump, and shrinking domestic investment is entrenching a low-growth trajectory,” the Korea International Trade Association said in a report last week, calling for structural reform. “Attempts to manage currency supply and demand without addressing fundamental structural issues will ultimately fall short,” the report warned. 2025-12-15 17:53:58
  • Asian stocks slide on AI bubble fears, Fed uncertainty
    Asian stocks slide on AI bubble fears, Fed uncertainty SEOUL, December 15 (AJP) - Asian equity markets fell broadly on Monday, pressured by growing skepticism over artificial intelligence-driven growth and renewed uncertainty about the future path of U.S. monetary policy. The sell-off reflected concerns that investor enthusiasm for AI-related stocks may be running ahead of fundamentals. Market uncertainty was compounded by reports that the Trump administration is considering Kevin Warsh, viewed as dovish, as the next chair of the U.S. Federal Reserve. The speculation appeared to contradict Fed Chair Jerome Powell’s recent guidance that only one additional rate cut is likely in 2026. In South Korea, the benchmark KOSPI index closed down 1.84 percent at 4,090.59, dragged lower by heavy foreign selling. Overseas investors sold a net 957 billion won ($650 million), while institutions offloaded 478.3 billion won. Retail investors, anticipating a rebound, were net buyers of 1.42 trillion won. Despite the equity sell-off, the Korean won strengthened, gaining 4.3 won to trade at 1,470.8 per dollar as of 4:40 p.m. local time. The yield on the 10-year government bond fell 8.4 basis points to 3.325 percent, reflecting a flight to safety. Large-cap stocks led declines. Samsung Electronics fell 3.76 percent to 104,800 won, while SK hynix dropped 2.98 percent to 554,000 won. Hyundai Motor slid 2.65 percent to 293,500 won, weighed by profit-taking and investor assessments that its autonomous driving technology trails rivals such as Tesla, Zeekr and General Motors. Korea Zinc bucked the broader market, jumping 4.87 percent to 1,592,000 won. Investors viewed Chairman Choi Yun-birm as gaining the upper hand in a management dispute with Young Poong, following reports that the company plans to build a 10 trillion won smelter in the United States and pursue an equity sale to U.S. investors through a third-party share issuance. Biotech stocks also advanced, supported by expectations that U.S. rate cuts will improve sector profitability. Samsung Biologics rose 4.73 percent to 1,772,000 won, while Samsung Episholding surged 7.26 percent to 709,000 won. Gains in biotech lifted the tech-heavy KOSDAQ, which closed 0.16 percent higher at 938.83. Aimed Bio, which has technology contracts with Boehringer Ingelheim and specializes in antibody-drug conjugate cancer treatments, soared 26.12 percent to 70,500 won, marking a record high since its December 4 listing. Elsewhere in Asia, Japan’s Nikkei 225 fell 1.31 percent to 50,168.11. Semiconductor-related stocks were hit hard amid U.S.-led AI skepticism, with Advantest sliding 6.42 percent and Ibiden tumbling 6.78 percent. In contrast, export-oriented stocks benefited from expectations of looser U.S. monetary policy, with Toyota Motor rising 2.76 percent to 3,350 yen. Taiwan’s TAIEX closed 1.17 percent lower at 27,866.94. Taiwan Semiconductor Manufacturing Company fell 2.03 percent to 1,450 Taiwan dollars, while MediaTek gained 1.07 percent on optimism surrounding its new Dimensity chipset and stronger smartphone sales in China. Mainland Chinese markets also declined. The Shanghai Composite Index slipped 0.55 percent to 3,867.92, while technology-heavy benchmarks saw steeper losses. The Shenzhen Component fell 0.87 percent, and Hong Kong’s Hang Seng Index was down 1.36 percent at 25,625 as of late afternoon trading. 2025-12-15 17:19:18
  • Seoul taps sovereign funds to bankroll AI and next-generation tech
    Seoul taps sovereign funds to bankroll AI and next-generation tech SEOUL, December 12 (AJP) - South Korea launching three-digit-billion-dollar government-sponsored growth fund investing AI and next-gen technology companies through equity and projecting financing is working on a separate wealth fund to systematically groom non-listed unicorn darlings. During a televised policy briefing to President Lee Jae Myung on Thursday, Deputy Prime Minister and Finance Minister Koo Yun-cheol outlined plans for a fund modeled on Singapore’s Temasek and Australia’s Future Fund. The vehicle, he said, would support large-scale projects in AI and semiconductors and pursue more aggressive equity investments than traditional policy funds. “By benchmarking Singapore’s Temasek, we aim to expand into proactive equity investment,” Koo said, signaling a shift from Korea’s long-standing preference for indirect or credit-based industrial support. In theory, South Korea already has a sovereign wealth fund. The Korea Investment Corporation (KIC), established in 2005 under former President Roh Moo-hyun and modeled on Singapore’s GIC, manages part of the country’s foreign-exchange reserves. Born out of lessons from the 1997 Asian financial crisis, KIC’s mandate has been conservative by design: to safeguard and reinforce foreign-currency assets through overseas investment. Koo’s proposal would mark a clear departure. The envisioned fund would add a domestic investment portfolio, channeling capital directly into Korean AI, chip and next-generation technology companies — a role KIC has never played. Uncertainty over execution Despite the political signaling, the contours of the new fund remain opaque. Its scope, target investments, funding sources and staffing have yet to be clearly defined, and even within the Ministry of Economy and Finance (MOEF), clarity appears limited. “We can only confirm that the New Growth Policy Division is currently responsible for the fund’s composition,” a MOEF official said on condition of anonymity. KIC, for its part, has not been consulted. A KIC official said the institution has received no notice of any expanded mandate or involvement. One idea floated by Koo involves allowing majority shareholders to pay inheritance taxes with listed shares rather than cash. The approach would ease liquidity pressure on business heirs while enabling the state to accumulate and actively manage equity assets. How such shares would be pooled, governed or deployed, however, has yet to be spelled out. Governance remains another unresolved issue. Unlike Saudi Arabia’s Public Investment Fund, where Crown Prince Mohammed bin Salman wields direct authority, or Temasek, which operates under Singapore’s Ministry of Finance with a clear legal and managerial structure, it is still unclear where a Korean sovereign growth fund would sit within the bureaucracy — or how insulated it would be from political cycles. Sustainability is a further concern. Previous administrations launched policy funds that were later dismantled or downsized. The Lee Myung-bak government’s “Resource Diplomacy Fund,” aimed at securing overseas energy and natural resources, was wound down after heavy losses. The Park Geun-hye administration’s “Unification Fund” and the Moon Jae-in government’s “K-New Deal Fund” were likewise shelved as political priorities shifted. The latest proposal also overlaps with initiatives already underway. Earlier Thursday, the Financial Services Commission launched the National Growth Fund, appointing FSC Chairman Lee Eog-weon, Mirae Asset Group Chairman Park Hyun-joo and Celltrion Chairman Seo Jung-jin as co-chairs of its steering committee. Formed hastily in mid-December, the fund is set to reach 150 trillion won ($101.8 billion) over five years, split evenly between government-guaranteed bonds and private capital. Of that total, 30 trillion won is earmarked for AI and 21 trillion won for semiconductors. A deliberation committee is expected to finalize next year’s operational plan later this year. Whether Seoul’s renewed interest in sovereign-style investing results in a durable Temasek-like institution — or becomes another short-lived policy experiment — will hinge on governance, continuity and the government’s ability to clearly define how this new vehicle fits into Korea’s already crowded landscape of growth funds. 2025-12-12 17:33:53