Journalist

Kim Yeon-jae
  • KOSDAQ shines alone; Nikkei suffers Black Friday on Gulf crisis, hawkish BOJ
    KOSDAQ shines alone; Nikkei suffers "Black Friday" on Gulf crisis, hawkish BOJ SEOUL, March 20 (AJP) — Asian equity markets showed mixed results with limited volatility on Friday, yet a sharp divide emerged between Seoul and Tokyo. While the tech-heavy KOSDAQ rallied by over 1 percent, Japanese stocks suffered a bruising "Black Friday" as monetary tightening fears gripped the Nikkei. The South Korean won showed no signs of recovery amidst the prolonged blockade of the Strait of Hormuz and the U.S. Federal Reserve’s hawkish stance on interest rates. Although the won rose to the 1,480 level during intraday trading, it surrendered all gains to close at 1,500 per dollar, unchanged from the previous session. Signals from the Bank of Japan (BOJ) regarding a potential rate hike on Thursday - right after the rate freeze - also weighed heavily on regional currency markets. With both the Fed and the BOJ maintaining hawkish leanings, as the impact of the Strait of Hormuz blockade on the South Korean economy began to materialize, the yield gap between South Korea’s long-term and short-term bonds narrowed further.The 10-year treasury yield fell 4.3 basis points to 3.736 percent, while the 3-year yield jumped 8.1 basis points to 3.410 percent. The benchmark KOSPI closed at 5,781.20, up 0.31 percent. Despite a mountain of external risks, the index managed a slight gain, led by a rally in alternative energy stocks. Retail investors net purchased 2.23 trillion won ($1.50 billion) and institutional investors bought 403.4 billion won, while foreign investors offloaded 2.67 trillion won in flight to safety and profit-taking moves. Alternative energy stocks, including nuclear and solar power, surged as the Middle East conflict continued to choke petroleum supply chains. Doosan Enerbility, a leader in domestic gas turbines, rose 3.1 percent to 109,600 won ($73.68). SK Innovation also climbed 3.26 percent to 113,900 won after its subsidiary, TerraPower, received a construction permit for an advanced nuclear reactor from the U.S. Nuclear Regulatory Commission (NRC). Daewoo E&C, which declared its entry into the nuclear sector last year, posted the largest gain, soaring 18.18 percent to 19,110 won. Hanwha Solutions, the nation’s top solar module maker, recovered previous losses to close at 51,700 won, up 3.92 percent. In contrast, heavyweights Samsung Electronics and SK Hynix weakened, falling 0.55 percent and 0.6 percent, respectively. The KOSDAQ index experienced a solitary surge, largely driven by the biotech sector ahead of the American Association for Cancer Research (AACR) annual meeting in April. Samchundang Pharm reclaimed the top spot in market capitalization, jumping 14 percent to 112,000 won following its success in developing a biosimilar for Eylea. Peptron, specializing in peptides, also soared 9 percent to 28,500 won. The Nikkei 225 plummeted 3.38 percent to close at 53,372.53. Beyond the Middle East risk and the Fed’s rate freeze, remarks from BOJ Governor Kazuo Ueda acted as a major headwind. Ueda signaled a potential rate hike, noting that "the view to prioritize upside risks to inflation is prevailing." Export-driven stocks, which have long benefited from low rates, took a hit. Market leader Toyota fell 2.32 percent to 3,325 yen ($21.84), and Honda dropped 3.2 percent. Semiconductor-related stocks also suffered, with Advantest and Tokyo Electron falling 4.58 percent and 2.38 percent, respectively. Notably, SoftBank Group Corp. plunged 5.12 percent to 3,558 yen on concerns over rising interest expenses as the "weak yen" era nears its end. Taiwan’s TAIEX edged down 0.43 percent to 33,543.88. While TSMC fell 0.54 percent to 1,840 TWD ($58.12) and Foxconn lost 1 percent, MediaTek rose 1.2 percent to 1,700 TWD, buoyed by its partnership with Nvidia and the success of the Dimensity 9500 chip. In Mainland China, sentiment remained subdued. The Shanghai Composite Index fell 1.24 percent to 3,957.05 on recession fears linked to the Hormuz blockade, while the SZSE Component remained relatively flat, dipping only 0.25 percent to 13,866.20. 2026-03-20 17:13:01
  • IMF to factor Middle East shock into world economic outlook in April
    IMF to factor Middle East shock into world economic outlook in April SEOUL, March 20 (AJP) - The International Monetary Fund perceives rising downside risks in the global economy from volatility in energy prices and financial market stemming from Middle East conflict and will factor the negative impact on growth and inflation into its updated economic outlook in April, according to a senior official. Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol met visiting Dan Katz, First Deputy Managing Director of the International Monetary Fund (IMF) in Seoul on Thursday and discussed strategic response to escalating global risks, the ministry said in a press release Friday. Katz pointed out that recent military clashes in the Middle East, the blockade of the Strait of Hormuz, and strikes on energy production facilities have significantly heightened volatility in energy prices and financial markets. He warned that these factors are increasingly likely to dampen global economic growth. The IMF official added that a prolonged conflict could severely hamper global expansion and trigger widespread inflation, noting that the IMF intends to closely monitor these projections. These assessments are expected to be reflected in the IMF’s World Economic Outlook (WEO) scheduled for release in April. Koo explained Seoul was deploying "all possible policy means" - enforcing cap on gasoline and fuel prices and fast-tracking supplementary budget - to minimize the fallout on the real economy. Katz commended the South Korean government for its "swift and decisive" response to recent market volatility and its impact on the real economy. He assessed that the South Korean economy has historically demonstrated strong resilience in the face of various domestic and international shocks. Furthermore, the IMF deputy chief expressed gratitude for South Korea’s contributions to capacity-building programs for vulnerable and low-income countries, including its recent funding to the IMF. Koo responded by reaffirming Seoul's commitment to further contributing to capacity-building initiatives in emerging fields, such as AI and digital technology. 2026-03-20 15:43:44
  • Seoul readies contingency as Qatar LNG force majeure looms
    Seoul readies contingency as Qatar LNG force majeure looms SEOUL, March 20 (AJP) - South Korea has prepared a contingency plan for a worst-case scenario in which liquefied natural gas (LNG) imports from Qatar are completely halted as missile strikes on the Gulf state’s key energy infrastructure raise the risk of prolonged supply disruption, according to government officials in Seoul Friday. The move underscores how the escalating Iran war is beginning to hit global energy supply chains directly, with retaliatory attacks now extending beyond oil routes into core LNG production facilities. According to government officials, the contingency plan — drawn up shortly after the outbreak of hostilities — assumes a “zero-import” scenario for Qatari LNG and outlines response measures including stockpile management and alternative sourcing. “We have already secured sufficient volumes to last through the end of this year,” a senior official at the Ministry of Trade, Industry and Energy said. “Even if imports from Qatar fall to zero, there will be no immediate issue in managing domestic supply.” Concerns intensified after Iran launched missile strikes on Qatar’s Ras Laffan industrial complex, the world’s largest LNG export hub, in retaliation for an Israeli attack on Iran’s South Pars gas field earlier this week. QatarEnergy said the strikes damaged facilities accounting for about 17 percent of its LNG export capacity and warned that repairs could take three to five years. The company’s chief executive also signaled the possibility of declaring force majeure on long-term supply contracts for up to five years, potentially affecting key buyers including South Korea. The prospect has rattled global markets, though industry officials in Seoul said a full-scale, long-term force majeure declaration remains unlikely given the massive financial losses it would entail. South Korea imported 6.97 million tons of LNG from Qatar last year, accounting for 14.9 percent of total imports, making it the third-largest supplier after Australia and Malaysia. Dependence on Qatari LNG has been declining as Seoul diversifies its import portfolio. That trend is expected to accelerate. A 2.1 million-ton long-term contract with Qatar is set to expire at the end of this year, reducing the country’s reliance on Qatari LNG to around 8 percent from next year. Officials said the government is pursuing a two-track strategy — securing short-term spot cargoes while identifying medium-term replacement contracts — to prepare for prolonged disruptions of up to five years. South Korea’s LNG system remains heavily centralized, with Korea Gas Corp. importing about 75 percent of total volumes, allowing for coordinated supply management. Strategic reserves, officially set at around nine days of mandatory stockpiles, are currently above required levels. Industry officials said that even if shipments from Qatar are delayed, adjustments can be made within annual delivery plans. The more immediate concern lies in prices. Qatar accounts for roughly one-fifth of global LNG exports, and any sustained disruption could shift the market balance sharply in favor of suppliers, reversing expectations of a looser supply environment in the coming years. The broader energy shock is already building. Oil prices have surged following attacks on Gulf infrastructure, with some projections suggesting crude could climb as high as $150 to $180 per barrel if disruptions persist into April. Such a scenario would likely spill over into LNG markets, increasing power generation costs and putting upward pressure on household gas and electricity prices in South Korea. 2026-03-20 13:57:05
  • South Koreas digital payments surge, platform dominance intensifies
    South Korea's digital payments surge, platform dominance intensifies SEOUL, March 20 (AJP) - Digital payment transactions in South Korea continued their steady upward trajectory last year, with both transaction volume and value rising from a year earlier. Notably, the dominance of tech platforms in simplified payment and remittance services has intensified, with their market share once again surpassing the 50 percent mark. According to data released by the Bank of Korea (BOK) on Friday, the average daily value of Payment Gateway (PG) services reached 1.55 trillion won ($1.04 billion) in 2025, a 9.2 percent increase from the previous year. The daily average number of transactions also climbed 11.8 percent to 33.64 million. PG services, which manage the overall online payment process, include major operators such as Nice Payments, KG Inicis, Toss Payments, and Kakao Pay. By payment method, credit cards accounted for approximately 77 percent of the total daily volume at 26.04 million cases. In terms of value, credit card payments reached 1.17 trillion won, up 12.3 percent year-on-year. Other payment methods, including "pay money" and local currencies, saw a 14.4 percent increase to 4.80 million cases (115.3 billion won). Bank transfers also rose significantly, jumping 20.2 percent to 2.00 million daily transactions. In contrast, the use of virtual accounts—often used for wire transfers—dropped 9.0 percent to 798,000 cases as the rise of simplified payments reduced their necessity. Despite a brief rebound in 2024, the downward trend resumed last year as payment platforms became more deeply integrated into daily life. The use of prepaid electronic payment services, where users charge funds in advance, also grew. Daily transactions rose 8.0 percent to 36.54 million, while the total value increased 11.0 percent to 1.31 trillion won. Payments through non-bank electronic financial business operators, such as Toss Payments and Naver Pay, reached 34.21 million cases, a 7.7 percent increase from 2024. These entities saw a 10.7 percent rise in value to 1.26 trillion won, maintaining a dominant market share within the prepaid sector. Specifically, simplified payments saw the largest growth, with transaction volume and value increasing by 31.1 percent and 27.2 percent, respectively. Simplified remittances also grew, reaching 6.95 million cases and 969.23 billion won. While the daily value of transportation card usage edged up 1.2 percent to 13.85 billion won, the number of transactions fell 7.2 percent to 11.27 million. This decline is attributed to certain operators adjusting their data collection methods in 2025 to exclude "invalid tags," such as transit transfers. Reliance on simplified payment and remittance services—which utilize bio-authentication or simple passwords instead of public certificates—surged to a daily average of 35.57 million transactions (up 14.9 percent) and 1.11 trillion won (up 14.6 percent). The expanding influence of "Electronic Financial Business Operators," led by Toss and Kakao, is particularly striking. Their daily transaction volume surged 24.7 percent to 22.67 million, accounting for 64 percent of the total simplified payment volume. The market share of these online financial platforms remained relatively stable between 49 percent and 50 percent from 2022 to 2024. However, the 4.4 percentage points jump to 54.9 percent in 2025 (by value) represents an unusually rapid acceleration in their market dominance. 2026-03-20 11:55:50
  • GULF CRISIS: Price pressures and weak won deepen Koreas policy bind
    GULF CRISIS: Price pressures and weak won deepen Korea's policy bind SEOUL, March 19 (AJP) - South Korea’s central bank is facing a growing dilemma as potential war-driven price shocks can collide with a weakening currency, tightening the room for monetary policy maneuver. Like the Federal Reserve, the Bank of Korea is widely expected to hold rates steady next month. But how long it can stay on hold will depend on the duration of the Middle East conflict and the scale of its economic fallout — from renewed inflation to rising financial risks. The disruption of the Strait of Hormuz — a vital route for energy and commodities bound for Asia — has already sent oil, shipping and raw material costs sharply higher, feeding directly into Korea’s import-dependent economy. Financial markets are reacting quickly. The dollar surged back above 1,500 won despite verbal intervention by authorities, while bond yields climbed. The 10-year government bond yield rose to 3.693 percent on Thursday, up 8.7 basis points from the previous session and nearly 25 basis points higher than before the conflict began in late February. Global energy prices have led the shock. Brent crude has jumped to above $111 per barrel, up more than 50 percent from pre-conflict levels, while Dubai crude — Korea’s key benchmark — reached $122.84 as of March 17. The surge is cascading through shipping markets. The Baltic Clean Tanker Index has nearly doubled from the start of the year, while daily charter rates for Very Large Crude Carriers have soared from about $30,000 to over $400,000, sharply raising transportation costs for fuel imports. Airlines are already passing through the burden. Asiana Airlines has nearly tripled fuel surcharges on New York routes, underscoring how quickly energy shocks are feeding into consumer costs. Industrial supply chains are also under strain. Disruptions in oil and gas imports are squeezing the production of key inputs such as naphtha and helium — both critical to refining and semiconductor manufacturing. For Korea, where exports hinge on energy-intensive industries, the implications are immediate. A report by the Korea Institute for Industrial Economics & Trade warned that even a three-week disruption in Hormuz could lift manufacturing costs by 5.4 percent. A prolonged blockade could push oil prices to $160 per barrel and drive liquefied natural gas prices up as much as 140 percent. The shock is also spreading to food and agriculture. Urea nitrogen prices — a key fertilizer component — have surged past $600 per ton from $344 at the start of the year, raising the risk of higher food prices in the coming months. “Escalating attacks in the Middle East are creating a global chokepoint for farmers,” said Alexis Maxwell, an agriculture analyst at Bloomberg Intelligence, warning of potential disruptions to fertilizer production. Korea’s vulnerability is structural. The country imports all of its crude oil and relies on Middle Eastern suppliers — particularly Saudi Arabia, the UAE, Qatar, Kuwait and Iraq — for roughly 70 percent of its supply. Until recently, inflation had remained relatively stable around the Bank of Korea’s 2 percent target, helped by softer oil prices. That dynamic is now shifting. “The simultaneous rise in oil prices and the exchange rate is expected to exert significant upward pressure on import prices,” said Lee Moon-hee, head of the BOK’s inflation statistics team. At the same time, financial risks are re-emerging. Household debt has climbed to about 1,852.7 trillion won, with mortgage-backed loans reaching 1,124 trillion won, even as the benchmark rate has remained at 2.5 percent since May last year. Rising market rates are already tightening borrowing conditions. The upper end of five-year fixed mortgage rates at major banks has exceeded 6 percent, with Suhyup Bank charging as high as 7.11 percent — the highest level in more than three years. The Bank of Korea has expressed concern over widening gaps between market rates and its policy rate. “A spread of over 0.6 percentage points between the three-year treasury yield and the benchmark rate is excessive,” Governor Rhee Chang-yong said earlier this year. That divergence is now complicating policy decisions. Cutting rates to support growth risks fueling inflation and weakening the currency further. Holding rates steady — or tightening — could deepen pressure on debt-laden households and the broader economy. If the conflict drags on, economists warn, South Korea could face a classic supply-driven stagflation shock — where slowing growth meets rising prices. The central bank, in effect, is running out of easy options. 2026-03-19 17:18:02
  • BOK hints at intervention as USD/KRW hits above 1,500 after Fed hold
    BOK hints at intervention as USD/KRW hits above 1,500 after Fed hold SEOUL, March 19 (AJP) - The Bank of Korea (BOK) vowed to take "stabilization actions" upon signs of volatility in domestic financial markets in renewed interventionist rhetoric Thursday after the local currency's spiral past its de facto defense line of 1,500 versus the U.S. dollar. "Uncertainties in the U.S. Federal Reserve's monetary policy path have escalated," said BOK senior deputy governor Ryoo Sang-dai during an emergency Task Force (TF) meeting addressing the fallouts from the Fed’s FOMC meeting and the ongoing blockade in the Strait of Hormuz. This marks the third emergency session this month since the launch of U.S.-Israel attacks on Iran in late February. The won’s weakness has intensified as hopes for a narrowing interest rate differential faded with the Fed's latest hold. The dollar has shot up to 1,505.9 in early Thursday session in Seoul, up sharply from 1,483.1 previous close. Since the rhetoric, the dollar has eased to 1,499.2 won. Market volatility has been exacerbated by the prolonged conflict in the Middle East. Crude oil prices have surged by over 40 percent in March, fueling inflationary pressures and weighing heavily on the trade-dependent South Korean economy. As of Thursday 9:40 a.m., Brent crude reached $110.6 per barrel, a surge of more than 52 percent compared to February 27, just before the conflict erupted. This comes amid escalating fears of actual disruptions in production and supply, following Israel's bombardment of South Pars, Iran’s largest gas field, and Tehran’s retaliatory strikes against facilities across the region, including in the UAE. "With external risks such as the persistent instability in the Middle East remaining high, the central bank is closely monitoring the situation" and "will take timely stabilization measures" when deemed necessary, he said. 2026-03-19 10:30:02
  • Seoul raises crude alert to Level 2 as Hormuz blockade bites
    Seoul raises crude alert to Level 2 as Hormuz blockade bites SEOUL, March 18 (AJP) — As the Middle East conflict continues to disrupt global energy supplies, the South Korean government Wednesday raised its crude oil security alert one notch to Level 2 ("Caution"), opening the way to direct intervention, including the possible release of strategic oil reserves. The Ministry of Trade, Industry and Energy (MOTIE) announced the upgrade from Level 1 ("Interest") to Level 2 effective as of 3 p.m. local time (6am UTC) Wednesday. This marks the Level 2 alert since the enactment of the National Resource Special Act early last year. The move follows the Level 1 alert for oil and gas issued on March 5, a few days after the conflict erupted. South Korea’s resource security framework operates on a four-tier scale: Interest, Caution, Crisis, and Alert. Under the "Caution" stage, authorities can formally review and prepare for the release of national strategic stockpiles. Spiking prices and shipping paralysis MOTIE attributed the decision to heightened instability among major oil producers following the attack on Iran, the subsequent blockade of the Strait of Hormuz, and a nearly 40 percent surge in international oil prices. Crude prices, which hovered between $60 and $70 per barrel until late February, skyrocketed following the outbreak on February 28. As of 4 p.m. Wednesday, West Texas Intermediate (WTI) stood at $92 per barrel, while Brent crude reached $101. Most critically, Dubai crude—the benchmark for South Korean imports—surged to $129.9 on Monday, nearly doubling its pre-conflict levels due to its heavy reliance on the now-blocked Hormuz route. Seoul is coordinating with the International Energy Agency (IEA) to establish a plan for releasing its allocated portion of 22.46 million barrels of strategic oil reserves. However, the ministry noted the timing and scale of the release will be subject to change based on private sector inventory levels and market trends. Mandatory conservation and demand reduction The government is also moving to enforce "mandatory energy conservation measures." These include strict indoor temperature limits for public institutions—set at a maximum of 28°C (82.4°F) in summer and 18°C (64.4°F) in winter. Additional "mandatory demand reduction measures," such as a five-day rotation system for vehicles (prohibiting driving one day every five days), are also under active consideration. President Lee Jae-myung Tuesday instructed his Cabinet to "swiftly establish diversified demand reduction measures, including the five-day or ten-day vehicle rotation systems, to encourage nationwide energy conservation." Longer-term strategies involve securing oil supplies that are not delivered through the Strait of Hormuz. Currently, approximately 70 percent of the country’s oil imports—sourced from Saudi Arabia, the UAE, Kuwait, Iraq, and Qatar—must pass through the narrow waterway. MOTIE is exploring options to exercise preemptive purchase rights for international joint stockpiles as a potential contingency. Gas alert remains at Level 1 Meanwhile, the alert for Liquefied Natural Gas (LNG) remains at Level 1 ("Interest"). Officials assessed that current LNG inventories remain sufficient, exceeding the legal requirement of nine days of supply. Most South Korean LNG firms currently hold between 10 to 14 days of reserves. While the loss of imports from Qatar, South Korea’s second-largest LNG supplier, remains a concern, MOTIE emphasized that supplies from Australia—the nation's largest provider at over 30 percent—and other diverse sources can help mitigate the shortfall. 2026-03-18 17:07:45
  • South Korea to inject over 1 billion in supplementary budget
    South Korea to inject over 1 billion in supplementary budget SEOUL, March 18 (AJP) - The government is coming up with a set of measures including a 1.5 trillion won (US$1.01 billion) in supplementary budget to buttress an economy hit by the escalating conflict in the Middle East, which began with U.S.‑led airstrikes on Iran late last month. In an emergency meeting chaired by Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol in Seoul on Wednesday, he pledged the swift implementation of the supplementary budget and other immediate measures to provide fiscal relief, stressing that "timing is key" in responding to a crisis. With no end in sight to the conflict in the already volatile region as it enters its third week since U.S. and Israeli strikes on Iran on Feb. 28, the ministry decided to designate naphtha as a temporary "economic security item" to mitigate its supply. The move allows energy authorities to secure alternative import routes or restrict exports through active interventions, if necessary. To help firms heavily reliant on Middle Eastern imports, a support program with a 1.5 trillion won fund will be offered, giving them a lifeline through interest rates about 2.3 percentage points lower. Koo also warned again that the government will take a hardline stance against refiners and others seeking to profit from soaring energy prices, following the ministry's earlier measure of a price ceiling on petroleum products. "Retail gas stations must comply with the measure without delay," Koo said, vowing to intensify on-site inspections to crack down on unfair practices such as hoarding. The supplementary budget aims to ease the burden on vulnerable companies including small- and medium-sized enterprises (SMEs) directly hit by soaring logistics and fuel costs, with the ministry also weighing an additional supplementary budget. It is also tapping into International Energy Agency (IEA) emergency oil reserves and exploring alternative suppliers through diplomatic channels to ensure a stable energy supply amid disruptions to maritime routes. Meanwhile, the ministry reaffirmed its commitment to long-term industrial innovation, having already earmarked 754 billion won to develop 246 artificial intelligence (AI)-driven products over the next two years under a new project called "AX-Sprint." The project aims to accelerate AI-driven transformation across all industries by providing tailored support for them. "Despite February's employment data showing an increase of 234,000 jobs, many young jobseekers are still struggling in the job market," Koo said, emphasizing that the technological push aims to secure long-term labor market stability amid global volatility. 2026-03-18 11:13:17
  • Koreas Feb job growth led by elderly and service, AI substitution hits entry jobs
    Korea's Feb job growth led by elderly and service, AI substitution hits entry jobs SEOUL, Mar. 18 (AJP) — South Korea’s labour market showed a deceptive resilience in February, with headline employment rising for the second consecutive month, but the underlying data reveals a deteriorating quality of jobs and a deepening structural crisis, as high-value industries shed workers and youth unemployment surged to its highest level in years. The number of employed people rose by 234,000 (0.8 percent) from a year earlier to 28.41 million, according to data released by the Ministry of Data and Statistics on Wednesday. While this marks a modest rebound from January's 194,000 (0.7 percent) gain, it remains significantly lower than the 300,000-plus levels seen late last year. The employment rate for those aged 15 to 64 stood at 69.2 percent, up 0.3 percentage points on-year. Youth employment hit by "hiring freeze" and automation The headline growth failed to hide a grim reality for the younger generation. The employment rate for those aged 15 to 29 plummeted by 1.0 percentage point to 43.3 percent, marking the sharpest decline in recent years. Simultaneously, the youth unemployment rate jumped 0.7 percentage points to 7.0 percent. In stark contrast, job gains were almost entirely driven by the elderly. Employment among those aged 60 and above surged by 284,000 (4.5 percent), indicating that the nation’s job growth is currently sustained by government-led welfare positions and roles for senior citizens rather than private-sector hiring for the youth. The impact of AI-driven automation is a significant factor in this shift. According to a Bank of Korea report released last October, 98.6 percent of the 211,000 youth jobs lost over the past three years were in occupations with high exposure to AI. This underscores a rapid structural displacement in the entry-level job market. High-value sectors in retreat A particularly concerning trend is the ongoing contraction in knowledge-intensive industries, a sector previously identified as a key engine for high-quality job creation. The professional, scientific, and technical services sector—which includes R&D and specialized consulting—shed 105,000 jobs (7.8 percent) in February. This marks a second consecutive month of decline following a loss of 107,000 jobs (8.0 percent) in the previous month. This follows a broader trend of weakening demand in high-value services, compounded by a decline of 42,000 jobs (3.2 percent) in the information and communications sector. The combination of high interest rates and reduced corporate investment has led to a noticeable contraction in quality employment opportunities within these knowledge-based industries. Service sector bloat and shorter hours The concentration of job growth in the service sector further underscores the fragile nature of the recovery. The health and social welfare sector added 284,000 jobs (9.9 percent), effectively accounting for more than the total increase in headline employment. Meanwhile, the agriculture, forestry, and fisheries sector saw a sharp decline of 90,000 jobs (8.2 percent), the largest drop since 2017. Furthermore, the quality of employment is shifting towards precarious, short-term roles. The number of people working less than 36 hours a week rose by 281,000 (4.6 percent), while the headcount for those working 36 hours or more fell by 94,000 (0.4 percent). Average weekly working hours dropped by 0.4 hours to 37.7 hours, signaling a softening in overall labor demand despite the increase in headcount. Rising unemployment and inactivity The total number of unemployed reached 993,000, up 54,000 (5.8 percent) on-year, with the overall jobless rate rising to 3.4 percent, up 0.2 percentage points. As inflation persists, more individuals are entering the job market, yet the economy is failing to absorb them into productive roles. While the economically inactive population decreased slightly by 39,000 (0.2 percent), the number of people who reported they were simply "taking a break"—not seeking work despite being capable—remains a persistent concern, particularly among those in their 20s and 30s. The February data confirms that while the quantity of jobs is being propped up by an aging population and welfare demand, the structural core of the labor market is facing increasing fragility. 2026-03-18 09:21:53
  • Korean legislative finally moves on FX support as won levels breach crisis levels
    Korean legislative finally moves on FX support as won levels breach crisis levels SEOUL, Mar. 17 (AJP) - South Korea’s National Assembly is scrambling to fast-track a package of exchange-rate support bills after sitting on them for months as the won comes under renewed pressure from the widening Gulf war. The urgency reflects not just broad dollar strength but a sharper loss of confidence in the won itself. According to the Financial Supervisory Service, the won weakened 4.12 percent against the dollar as of Monday from end-February, before the war erupted, with the rate rising from 1,438.4 won to 1,497.6 won. That compares with a 2.82 percent rise in the Dollar Index over the same period and a 2.08 percent gain in the dollar against the Japanese yen — even as the two neighboring economies share similar exposure to disruptions in the Strait of Hormuz. China’s yuan, also dependent on Gulf shipping routes, moved only 0.55 percent. The scale of the move has reinforced market concerns that Korea is being punished more severely than its peers, reflecting heavier foreign outflows from local equities that had outperformed prior to the war. The won-dollar exchange rate averaged 1,476.9 won this month, the highest monthly level since the 1998 Asian financial crisis, while last week’s average climbed to 1,480.7 won. The currency briefly breached the 1,500 won threshold in daytime trading on Monday for the first time since the global financial crisis, triggering speculation authorities may have given up 1,500-won defense. "We are not 100 percent sure about intervention. But the dollar has retreated. It can be attributed to the easing in bond yields," said one trader on Tuesday. The dollar eased to 1,493.40 won as of 4:00 p.m. in Seoul. Volatility still has been topping peers. The won’s average daily swing widened to 14.24 won, the largest since the 2010 euro-area sovereign debt crisis, while intraday moves stretched to 24.82 won — the biggest since Korea introduced overnight foreign-exchange trading. Foreign investors are reacting more sensitively to Korea’s exposure to Gulf energy risks and surging oil prices. Brent crude jumped 42.3 percent from end-February to March 16, to $103.14 a barrel, while WTI surged 47.28 percent to $98.71. Compared with end-2025, Brent is up 69.5 percent and WTI 71.91 percent. Those terms-of-trade pressures are now feeding directly into Korean asset markets. Foreign investors sold a net 16.5 trillion won worth of Korean stocks in March through March 16, including 16.1 trillion won from the KOSPI alone, according to the same FSS data. Korea’s five-year sovereign CDS premium also widened to 28.9 basis points from 24.6 basis points at end-February. Only after the exchange rate broke above 1,500 won did the legislature move to advance the so-called “Triple Exchange Rate Stability Acts.” On Monday, the Tax Subcommittee of the Strategy and Finance Committee approved the package, which includes amendments to the Restriction of Special Taxation Act and the Special Tax for Rural Development Act. Having cleared the subcommittee, the bills are expected to go before the full committee on Tuesday and then to a plenary session on March 19. The measures were first proposed on Jan. 3 by Rep. Jung Tae-ho of the Democratic Party, after the finance ministry outlined the plan in December when the won slid toward crisis-era levels. They were further stalled by political wrangling over tax fairness and broader legislative disputes. The centerpiece of the package is an amendment to the Restriction of Special Taxation Act that would grant a 50 to 100 percent deduction on capital gains taxes for investments in domestic stocks made through Return to Korea Investment Accounts, or RIAs. The aim is to encourage capital repatriation and stem the outflow of won-denominated funds. The package also includes income deductions for investments in currency-hedging products and raises the exclusion rate for dividends received from overseas subsidiaries to as much as 100 percent. Lawmakers say the measures are designed to attract foreign currency holdings back onshore while promoting financial products that cushion exchange-rate volatility. Given the won’s weakening trend, economists remain skeptical about the effectiveness of the incentives. “Capital outflows from the National Pension Service and individual overseas investors exceeded $140 billion last year, surpassing the current account surplus of around $100 billion,” said Lee Seung-ho, a senior research fellow at the Korea Capital Market Institute. While acknowledging the need to attract capital back into domestic markets, he questioned whether the tax breaks would be sufficient to alter investor behavior. He noted that overseas equity investments already benefit from an annual tax exemption of up to 2.5 million won and that many retail investors operate on a relatively small scale, limiting the likely policy impact. Other KCMI researchers, including Kim Min-ki and Kang So-hyun, argue that the shift toward foreign assets reflects deeper fundamentals: stronger returns in global technology stocks, lower barriers to overseas investing and persistent expectations of further won depreciation. Until those conditions change, they say, the outflow trend is unlikely to reverse. Some in the market also warn that the legislation could send an unintended signal. “Currency-related tax support can itself be read by the market as a signal that the authorities expect the won to remain weak,” a foreign-exchange market source said on condition of anonymity. “If it is seen as defensive rather than confidence-building, it could have the opposite effect.” 2026-03-17 16:44:15