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FOMO stock bet fuels household loans in Korea in May SEOUL, June 11 (AJP) - Bank loans rose sharply in May as South Koreans frantically borrowed out of the fear of missing out (FOMO) on record stock bull and for housing on expectations for rate hikes, central bank data showed Thursday. Bank household loans increased by 6.9 trillion won ($4.52 billion) in May, widening from a 2.1 trillion won gain in April and exceeding the 5.2 trillion won increase recorded a year earlier, according to the Bank of Korea. The sharpest turnaround came from other loans, which include unsecured credit loans, credit lines and stock-backed loans. Other household loans rose by 3.7 trillion won in May after falling by 600 billion won in April, with the BOK citing large-scale stock investment by individuals and seasonal funding demand linked to Family Month. Mortgage lending also increased. Bank mortgage loans rose by 3.2 trillion won, compared with a 2.7 trillion won gain in April, supported by mid- to low-priced housing transactions in the Seoul metropolitan area and demand for interim payments on presold homes. The loan growth came as the stock market extended a steep rally. The KOSPI climbed on optimism over the semiconductor cycle and stronger corporate earnings, hitting a record high of 8,801 on June 2. The index later corrected, led by semiconductor shares, as expectations for U.S. Federal Reserve rate hikes strengthened. Still, as of June 10, the KOSPI remained 17.2 percent above its end-April level. Bond yields have been rising in line with the expectations of a rate hike as early as July on inflationary pressure. The three-year Treasury yield rose to 3.88 percent Wednesday from 3.60 percent at the end of April, while the 10-year yield climbed to 4.27 percent from 3.92 percent over the same period. The BOK said government bond yields were affected by inflation concerns at home and abroad and changing expectations for monetary policy. Corporate funding also showed signs of shifting toward bank loans. Bank lending to companies rose by 10.6 trillion won in May, following a 10.7 trillion won increase in April. Loans to large companies increased by 5.2 trillion won, while lending to small and medium-sized enterprises rose by 5.4 trillion won. The BOK said SME lending remained strong as banks continued to expand corporate credit under their productive finance push, while large companies sought working capital, including funds to redeem corporate bonds. Corporate bond issuance remained weak, with companies recording a net redemption of 1.1 trillion won in May as higher interest rates raised issuance costs and pushed firms toward alternative funding sources such as bank loans. Commercial paper and short-term bonds also shifted to a net redemption of 2.1 trillion won. Deposits at financial institutions rose sharply. Bank deposits increased by 48.8 trillion won in May after falling by 6.8 trillion won in April, helped by short-term funds placed by some large companies and banks' efforts to secure lending resources and manage regulatory ratios. Asset management firms also saw large inflows. Their deposits rose by 86.4 trillion won in May, led by stock funds, which increased by 58.8 trillion won on valuation gains from higher domestic and overseas share prices and continued new investment inflows. June 11, 2026 13:37 -
KOSPI Rally Drives Surge in Household Debt; May Bank Lending Rises by 6.9 Trillion Won Last month, as the KOSPI soared, demand for stock investments led to a significant increase in household loans from banks. According to the Bank of Koreas report on financial market trends released on June 11, the balance of household loans from deposit banks, including policy mortgage loans, reached 1,181.8 trillion won at the end of May, an increase of 6.9 trillion won from the previous month. Household loans rose sharply, particularly in other loans, compared to an increase of 2.1 trillion won in the previous month. The balance of credit loans and other loans stood at 240.2 trillion won. After a decline of 600 billion won in April, this category saw a surge of 3.7 trillion won in May, marking the largest increase since April 2021, when it rose by 11.8 trillion won. This surge is attributed to a combination of significant individual stock investments and seasonal funding needs during the traditional family month. Park Min-cheol, head of the Bank of Koreas market management team, stated, While there is typically an increase in funding needs during the family month, this years rise in May is largely driven by substantial demand for personal stock investment funds. He added, In May, foreign investors engaged in large-scale selling for profit-taking and portfolio rebalancing, but individual investors absorbed a significant portion of this selling. It appears that leverage investments using margin loans and bank loans have also increased during this process. However, while investment is a personal decision, it is important to note that if stock prices decline in the future, forced selling could increase market volatility. Mortgage loans rose by 3.2 trillion won to 940.8 trillion won. While the demand for jeonse loans continued to decline, housing transactions in the mid-to-low price range in the metropolitan area increased, along with a rise in demand for interim payments on previously sold properties. Jeonse loans fell by 600 billion won in May, following decreases of 400 billion won in March and 600 billion won in April. Corporate funding needs also grew. Last month, the balance of corporate loans from banks increased by 10.6 trillion won to 1,408.3 trillion won. Loans to large corporations rose by 5.2 trillion won to 317.1 trillion won, while loans to small and medium-sized enterprises increased by 5.4 trillion won to 1,091.2 trillion won. The increase in large corporate loans was driven by ongoing lending activities from banks and the need for working capital to repay corporate bonds, expanding from a previous increase of 5 trillion won. Small and medium-sized enterprise loans continued to grow as banks maintained a trend of expanding corporate credit for productive finance. Corporate bond issuance faced challenges due to rising interest rates, leading to a net repayment of 1.1 trillion won as companies turned to bank loans and other alternative funding sources. Commercial paper and short-term bonds also shifted from a net issuance of 4.9 trillion won last month to a net repayment of 2.1 trillion won. Looking ahead, the flow of household loans is expected to change in response to government real estate policies and stock market trends. Park noted, After the end of the capital gains tax exemption, the government may introduce measures, and there is uncertainty regarding the direction of the housing market. The stock market is also likely to see significant volatility in other loans depending on market conditions.* This article has been translated by AI. June 11, 2026 12:03 -
KOSPI Plummets 4%, Market Capitalization Drops by 355 Trillion Won as Fear Grows, Individual Investors Buy the Dip ◆Ajou Economic Major News ▷On June 10, the KOSPI index fell more than 4% in a single day, resulting in a loss of 355 trillion won in market capitalization. -The KOSPI 200 Volatility Index (VKOSPI), often referred to as a fear gauge, reached 88.45, maintaining a historically high level. -Recent market conditions have been marked by extreme volatility, with the sidecar mechanism activated 24 times in the securities market this year. -This is approaching the annual activation count of 26 seen during the 2008 global financial crisis. -Despite the downturn, individual investors have been actively buying undervalued large-cap semiconductor stocks. -From June 1 to June 10, net purchases in the securities market totaled 21.9866 trillion won. -Securities firms continue to raise target prices for Samsung Electronics and SK Hynix. ◆Key Reports ▷Data Talk #20: MSCI Developed Markets Inclusion Issue [Korea Investment & Securities] -MSCI will announce the results of its annual market reclassification review on June 23 (Korean time, June 24 at 5:30 a.m.). -The fastest scenario for South Korea to be classified as a developed market would involve being added to the Watch List this year, with an announcement in June 2027 and actual inclusion by the end of May 2028. -South Korea currently ranks second in market capitalization among emerging market indices and would become fifth in developed markets and third in EAFE upon inclusion. -Funds tracking developed and EAFE indices are larger than those for emerging markets, but South Koreas proportion may decrease, leading to a potential outflow of index fund capital. -However, inclusion in developed markets is expected to enhance strategic asset allocation by global pension funds and sovereign wealth funds. -Additionally, the potential for increased index representation for China and Vietnam could provide a positive outlook amidst uncertainties in emerging market indices. ◆Major Disclosures After Market Close (June 10) ▷Hyundai Motor Company to invest 26 trillion won in a new R&D hub in Wirye. ▷Lotte Shopping to issue 260 billion won in corporate bonds for debt repayment. ▷Daehan Optical Communication ends a 3.5 billion won bond seizure. ▷Webzen to repurchase an additional 10.9 billion won worth of its own shares. ▷Fantagio to list 3.27 million new shares through a third-party allocation in a capital increase. ◆Fund Trends (as of June 9, excluding ETFs) ▷Domestic equity funds: +75.7 billion won ▷Overseas equity funds: -74.5 billion won ◆Key Schedule for Today (June 11) ▷South Korea: Simultaneous expiration of futures and options, May employment trends. ▷United States: May Producer Price Index. ▷Europe: ECB monetary policy meeting.* This article has been translated by AI. June 11, 2026 08:21 -
U.S. Stocks Decline Amid Middle East Tensions and AI Profit-Taking U.S. stocks fell sharply as tensions between the U.S. and Iran escalated and investors took profits in artificial intelligence (AI) semiconductor and technology stocks. On June 10, the Dow Jones Industrial Average closed down 953.33 points, or 1.87%, at 49,918.78. The S&P 500 dropped 119.66 points, or 1.62%, to finish at 7,266.99, while the tech-heavy Nasdaq Composite fell 509.32 points, or 1.98%, to close at 25,169.50. This marked the first time in three weeks that the New York Stock Exchange experienced two consecutive days of declines, driven by ongoing concerns over the overvaluation of AI-related stocks and negative developments in the Middle East. Stocks that had previously led the market rally, particularly in the semiconductor and AI sectors, saw significant declines. Nvidia, a leading AI company, fell 3.4%, while Micron Technology dropped 4.7%. The Philadelphia Semiconductor Index decreased by 3.6%. Notably, Supermicro Computer (SMCI), an AI server manufacturer, plummeted 23.1% after announcing a plan to issue $7 billion in stock to finance component purchases. The unrest in the Middle East further dampened investor sentiment. President Donald Trump warned on Truth Social about the need for the U.S. to respond to hostilities with Iran, stating that there would be a price to pay and indicating a willingness to escalate military action against Iran. Iranian President Ebrahim Raisi also announced a strong retaliatory stance, heightening fears of conflict between the two nations. As a result, international oil prices rose. August Brent crude futures increased by 1.80% to $93.10 per barrel, while July West Texas Intermediate (WTI) crude futures rose by 2.07% to $90.03. Jedd Allbrook, a portfolio manager at Agent Capital Management, told CNBC, The Iran war issue is a very significant variable for the market. If President Trump can control the situation and negotiate with Iran, the Strait of Hormuz could reopen, but if not, oil prices are bound to rise significantly. Additionally, the U.S. Consumer Price Index (CPI) for May, released that morning, raised inflation concerns among investors. The May CPI rose 4.2% compared to the same month last year, marking the largest increase in three years. Excluding volatile food and energy prices, the core CPI increased by 0.2% from the previous month and 2.9% year-over-year, aligning with market expectations. However, rising oil prices raised worries about prolonged inflationary pressures. Market analysts suggest that the Federal Reserve may raise interest rates at least once by the end of the year, reflecting this sentiment in asset prices. In the bond market, long-term inflation concerns were evident. The yield on the 10-year U.S. Treasury rose by 3 basis points to 4.55%. In contrast, the yield on the more sensitive 2-year Treasury dipped slightly to 4.12%. Gold, considered a safe-haven asset, also weakened. The spot price of gold fell 4.3% to $4,077.91 per ounce, as rising oil prices and the potential for further interest rate hikes diminished the appeal of non-yielding gold investments.* This article has been translated by AI. June 11, 2026 07:09 -
Shinhan Card Issues $400 Million Formosa Bond, First by Non-Bank Institution Shinhan Card has successfully issued a Formosa bond structured as a floating-rate note (FRN), becoming the first non-bank financial institution in South Korea to do so. Despite increased global interest rate volatility, the company attracted strong investor demand, achieving a record-low funding rate. On June 10, Shinhan Card announced the public issuance of a $400 million (approximately 613.2 billion won) Formosa bond. A Formosa bond is a debt security issued in Taiwan by foreign financial institutions or corporations in foreign currencies such as U.S. dollars. This bond has a maturity of 3.5 years and the interest rate was set at SOFR (Secured Overnight Financing Rate) plus 0.82 percentage points. Even when converted to a fixed-rate basis, this represents the lowest spread among Formosa bonds issued by domestic non-bank financial institutions. The demand forecast revealed orders totaling $1.69 billion, more than four times the issuance amount. Over 60 major institutional investors from Asia, including local banks and securities firms in Taiwan, showed significant interest. As a result, Shinhan Card finalized the interest rate approximately 33 basis points lower than the initial guidance. This marks Shinhan Cards third issuance of a Formosa bond. Shinhan Card explained that its strategy of adopting a floating-rate structure and engaging in proactive communication with Taiwanese investors helped secure demand amid market volatility. A Shinhan Card official stated, The issuance of this floating-rate Formosa bond adds a new funding option for domestic issuers, including non-bank entities. We will continue to leverage the global bond market to establish a stable funding base.* This article has been translated by AI. June 10, 2026 16:48 -
Jeonse Loan Rates Exceed 6% Amid Rising Market Rates As mortgage rates approach 8%, jeonse loan rates have also surpassed 6%. With rising loan rates, the interest burden on vulnerable borrowers is increasing. Concerns about further rate hikes have grown, particularly after President Lee Jae-myung recently identified jeonse loans as a key factor in rising housing prices. According to the financial sector on June 10, the jeonse loan rates from the five major banks—KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup—ranged from 4.11% to 6.71% for two-year loans. This marks an increase from the previous month’s rates of 3.77% to 6.27%, with the lower end rising by 0.34 percentage points and the upper end by 0.44 percentage points. As market interest rates have surged, the lower end of jeonse loan rates has exceeded 4% this month, while the upper end has climbed into the high 6% range. Variable-rate jeonse loans are also nearing 6%, with rates recorded between 3.15% and 5.85%. The rise in bank loan rates is attributed to increasing market interest rates. The benchmark rate for financial bonds (non-guaranteed, AAA) for five years was 4.394% as of the previous day, up 0.895 percentage points from the end of last year’s 3.499%. The new handling rate for variable-rate jeonse loans, known as COFIX, also rose to 2.89% in April, an increase of 0.08 percentage points from the previous month. However, there is ongoing upward pressure on jeonse loan rates. During a press conference marking his first anniversary in office on June 8, President Lee Jae-myung pointed to jeonse loans as a major cause of rising housing prices, expressing concern that banks have excessively issued these loans, leading to a concentration of funds in real estate. According to the Bank of Korea, the balance of jeonse loans from deposit banks stood at 166.6 trillion won at the end of last year, more than six times higher than a decade ago. In the wake of the presidents remarks, market analysts predict that the pressure to increase jeonse loan rates will intensify. With ongoing pressure from financial authorities to manage household loans, banks may find it challenging to actively expand lending. The Bank of Koreas indication of a potential shift in its monetary tightening stance also raises concerns about rising loan rates. An increase in the benchmark rate would affect financial bond rates and COFIX, leading to higher mortgage and jeonse loan rates. A financial sector official stated, The situation in the Middle East and the potential for domestic and international benchmark rate hikes are being reflected in market interest rates, leading to continued increases in jeonse loan rates. If discussions on raising the benchmark rate coincide with jeonse loan regulations, further increases in loan rates are likely unavoidable in the near term.* This article has been translated by AI. June 10, 2026 16:27 -
KB Kookmin Bank Issues $100 Million Blockchain-Based Digital Bonds, First Among Korean Banks KB Kookmin Bank has successfully issued blockchain-based digital bonds, becoming the first among South Korean commercial banks to do so.The bank announced on June 10 that it has issued $100 million in dollar-denominated digital bonds with a two-year maturity, underwritten solely by HSBC. These digital bonds utilize blockchain technology to manage the entire bond process, including issuance, registration, trading, and settlement, which shortens the settlement period and enhances operational efficiency compared to traditional bonds.The digital bonds were issued through HSBCs Orion digital asset platform and are linked to a clearing and settlement system operated by the Central Moneymarkets Unit (CMU) under the Hong Kong Monetary Authority (HKMA).KB Kookmin Bank is expanding its financial services utilizing digital assets and blockchain technology, having recently completed technology validation for payments and remittances based on a Korean won stablecoin.A bank official stated, This issuance is part of the groups transformation and expansion strategy to proactively respond to changes in the digital financial environment and strengthen our future financial infrastructure capabilities. We aim to provide safe and convenient financial services through digital financial innovation.* This article has been translated by AI. June 10, 2026 15:57 -
RESCENE: A Multinational Girl Group Blossoming in Their Own Time Every day, dozens of songs and artworks are created. While music, drama, and film are introduced through countless media, what reaches the public is often less than half. The artists who sing and act face similar challenges. Despite their exceptional talents, they are frequently undervalued or go unnoticed. is a segment dedicated to introducing various artists and exploring their growth. It is also a heartfelt tribute to these artists. Every flower has its own time to bloom.Some flowers bloom in early spring, while others wait until after enduring the cold winter to fully blossom. The group RESCENE has chosen a path of gradual growth rather than immediate attention. They have remained steadfast, maintaining their unique essence even if their blooming has been somewhat delayed. They have walked their path without rushing or hesitating, and now they are finally facing their season and blooming vibrantly.Comprising five members—Wonnie, Minami, Rive, Mei, and Jena—RESCENE is a multinational girl group that dreams of leaving a lasting fragrance. The groups name combines Scene and Scent, signifying their desire to linger in someones heart through music, just as a specific moments memory is tied to a fragrance. In an industry where fleeting trends come and go, RESCENE has chosen to cultivate their own unique emotions rather than be swept away by the current. Their journey, built on a sophisticated musical foundation, demonstrates why they have not rushed their blooming.Their discography reflects a journey of crafting different fragrances with each album. The debut single Re:Scene started with a floral scent. The pre-released track YoYo invited listeners drawn to RESCENEs essence, while the title track UhUh showcased a confident and captivating energy through the Burning Flower concept. The flowers they have cultivated are elegant, resilient, and encapsulate their solid strength within a fragrant image.Following this, RESCENE expanded their world by varying the texture and temperature of their scents. In their first mini-album SCENEDROME, they explored the meaning of existence, which becomes clearer when meeting other scents through Ambergris. Their second mini-album Glow Up captured their growth in style and skill within a fresh and clean emotional landscape reminiscent of soap. The third mini-album Lip Bomb blended five berry scents, resulting in a product that vividly expressed the stories of both me and us through the unique colors of each member.With the digital single Runaway, the narrative of their scent became more robust. RESCENE depicted a journey of breaking free from the confines they had imposed on themselves, set against the heavy and somber echoes of incense. The blurred boundaries of their identities became clearer, as the five members forged a bond on a shared path. From the initial excitement of floral scents to the depth of Ambergris, and from the clarity of soap scents to the vitality of berries and the determination of incense, RESCENEs journey has borrowed different fragrances but ultimately aimed for a singular essence. Starting from a desire to be remembered, they are now completing their true me and us on the path they have chosen. What they have accumulated has become a tangible force that changes the indicators of reality outside the stage. Recently, the viral meme Geoje Yaho-! featuring Japanese member Minami, along with local content showcasing the Gyeongsang dialect, has become a crucial gateway for the public to engage with their music. The buzz around this content has directly translated into listener engagement, leading to a remarkable resurgence of their mini-albums title track Love Attack, which was released nearly two years ago. The song has soared 719 spots on the Melon TOP 100 chart, reaching a peak of 28, and has also secured the 10th spot on Apple Musics TOP 100 Korea and the 11th spot on YouTube Musics Top 100 Korean Songs, solidifying the RESCENE boom as a tangible achievement.In a K-pop market dominated by the capital and marketing of large agencies, RESCENEs ability to carve out their own space is not due to luck but rather a steadfast attitude cultivated over time. In their early days, when they lacked recognition, the agencys representative personally promoted them on an Arsenal football fan cafe and traveled to Geoje to cast members. The members dedication to expanding their connection with the public, even performing on elementary school dirt playgrounds, has laid a solid foundation. Coupled with the well-crafted music from a dedicated songwriting team led by a Berklee College of Music graduate, their progress has gained momentum. The recent success of Love Attack is not merely a stroke of luck from the outside but an inevitable outcome of good music and the time they have invested. RESCENEs progress signifies more than just a passing trend. They have proven that the essence of music and skill remains valid in a market where buzz can easily translate into consumption. Their commitment to maintaining their unique essence amidst fleeting trends is invaluable. Even if their blooming has been slightly delayed, the fragrance they have cultivated through their own strength will not easily dissipate.Having demonstrated their presence through good music and dedication, RESCENE will release a remake digital single in July. While Runaway showcased a profound internal transformation, this upcoming release will present a new stage reinterpreted with their unique sensibility. Building on the solid foundation established through their resurgence, they are now ready to embrace the next season with an even deeper and clearer fragrance. June 10, 2026 08:45 -
Record 64 Trillion Won in Margin Trading Amid Market Volatility ◆Ajou Economics Major News ▷[Fear of Forced Liquidation Becomes Reality] With 64 Trillion Won in Margin Trading, Retail Investors Suffer Amid Unprecedented Market Volatility - As the domestic stock market experiences a sharp decline, concerns over forced liquidation are rapidly increasing. - Recent official statistics indicate that the amount of forced liquidations from margin trading has reached 305.3 billion won in the last two counts, and when considering the historically high balance of margin trading (investing with borrowed money), the actual pressure for forced liquidation in the market may be significantly greater than the statistics suggest. - According to the Korea Financial Investment Association, as of June 7-8, the actual amount of forced liquidation compared to margin trading balances was recorded at 305.3 billion won. - The proportion of forced liquidation compared to margin balances was notably higher than usual, recording 9.1% on June 5 and 8.2% on June 8, compared to the typical range of 1-2%. - The total amount of credit financing piled up in the domestic stock market is at a historical peak. As of June 8, the total balance of credit trading financing was 37.779 trillion won. - Of this, the KOSPI market accounted for 28.3265 trillion won, while the KOSDAQ market accounted for 9.4639 trillion won. On the same day, the balance of collateralized securities financing also reached 26.5509 trillion won. Adding these figures brings the total margin trading amount to a record high of 64.3413 trillion won. ◆Major Reports: Interest Rates Create Opportunities, Spreads Generate Profits [iM Securities] - Credit spreads remain stable, but the potential for rising interest rates poses a variable. - Both ultra-high-grade bonds (government and bank bonds) and high-grade bonds (corporate bonds) have returned to issuance levels in line with historical averages. - Government bonds are primarily issued for social overhead capital, while mortgage-backed securities are being redeemed. - Bank bonds show a differentiation between special bank bond issuances and general bank bond redemptions. - As interest rate volatility increases, the issuance of floating-rate notes (FRNs) has surged. - Corporate bond issuance has slowed, with companies diversifying their funding through loans and short-term financing. - Supply pressures are not significant, limiting upward pressure on spreads. - However, uncertainty remains regarding potential supply increases in the second half of the year. ◆Key Announcements After Market Close (June 9) ▷Hanssem decided to enter into a trust agreement for the acquisition of its own shares worth approximately 50 billion won with Shinhan Investment Corp. ▷KC Cottrell announced the release of 91,157,556 common shares held by KC Green Holdings from mandatory holding (escrow) on June 12. ▷Meta Labs decided to acquire 4,878,049 shares of Metacare in cash to strengthen responsible management as the largest shareholder (through a third-party allocation of new shares). ▷Pearl Abyss decided to retire its own shares worth approximately 17.3 billion won. ▷Medytox decided to acquire 64,350 shares of its own common stock. ◆Fund Trends (as of June 9, excluding ETFs) ▷Domestic Equity: 184.7 billion won ▷Overseas Equity: -29.4 billion won ◆Todays Key Schedule (June 10) ▷United States: Consumer Price Index (May) ▷China: Consumer Price Index (May), Producer Price Index (May)* This article has been translated by AI. June 10, 2026 07:27 -
Won gains on NPS hedge; bonds rebound SEOUL, June 09 (AJP) - The South Korean won extended its gains for a second straight day Tuesday after foreign exchange authorities formalized currency hedging measures for the National Pension Service (NPS). The bond market also rebounded for the first time in four sessions, helped by bargain-hunting and reports that the Bank of Japan (BOJ) may keep its government bond purchases at current levels. In the Seoul foreign exchange market, the won closed at 1,512.1 per dollar, up 22.9 won from the previous session. The currency continued to strengthen after turning sharply higher Monday afternoon. The main driver was policy intervention. Foreign exchange authorities said the NPS began currency hedging procedures Monday, a move seen as helping support the won. Expectations of a faster hawkish response from the Bank of Korea (BOK) also aided the rally. Kim Jin-wook, an economist at Citigroup, said Monday that "the BOK could respond faster than expected if market instability expands," raising the possibility of an extraordinary Monetary Policy Committee meeting in June. A strong rebound in stocks further eased risk aversion. The benchmark KOSPI jumped 8.18 percent to close at 8,096.93, recovering most of Monday’s losses. The bond market also snapped a three-session losing streak. The benchmark three-year government bond yield fell 8.4 basis points to 3.856 percent, while the 10-year yield dropped 7.5 basis points to 4.273 percent. Sentiment improved after Japanese media reported that the BOJ may pause its plan to reduce Japanese government bond purchases. The reports raised hopes that the recent slide in global bond prices could ease. Japanese government bond yields are closely watched in Korea because they serve as a key reference point for Asian long-term rates, prompting global investors to adjust Korean Treasury positions in tandem. Market participants also pointed to a shift in foreign investor positioning. "Foreign investors, who had remained net sellers in the morning, turned net buyers of both three-year and 10-year bond futures in the afternoon," a fixed-income market source said on condition of anonymity. The source said the shift likely gave additional support to both bonds and the won. June 9, 2026 18:07 -
Bank of Japan Poised to Raise Interest Rates to 1% for First Time in 31 Years The Bank of Japan is increasingly likely to implement an interest rate hike at its monetary policy meeting this month. Rising oil prices due to instability in the Middle East have raised concerns that inflation could spread more broadly. The central bank is considering raising the current policy interest rate from 0.75% to 1.0%. If approved, this would mark the first time Japans policy interest rate has reached the 1% level since 1995. On June 9, the Nikkei reported that the Bank of Japan plans to decide on the rate hike during its monetary policy meeting scheduled for June 15-16. Governor Kazuo Ueda and other officials are expected to present the proposal, which is anticipated to receive majority support from the nine-member policy board. The Asahi Shimbun also reported the likelihood of the central bank raising the policy rate to 1.0% during the June meeting. The Bank of Japans inclination toward raising rates stems from concerns that inflationary pressures may be greater than previously anticipated. The central bank believes that rising oil prices, driven by geopolitical tensions, could lead to increased energy costs and higher prices for consumers. The consumer price index (CPI), excluding temporary factors such as government subsidies for electricity and gas, rose 2.8% in April compared to the same month last year, up from a 2.5% increase in March. Additionally, the corporate goods price index rose 4.9% year-on-year in April, marking the highest increase since May 2023. In a speech on June 3, Governor Ueda remarked on the potential impact of Middle Eastern tensions on the economy and prices, stating, Overall, the risks of upward pressure on prices are greater, and the likelihood of these pressures appearing sooner is also higher. He indicated that if the risks of inflation outweigh those of economic slowdown, there would be a need for thorough discussions on the possibility of a rate hike. Ueda also suggested that the central bank could proceed with a rate increase despite the ongoing uncertain situation in the Middle East. Measures to Stabilize the Bond Market However, the Bank of Japan plans to implement measures to stabilize the government bond market while raising interest rates. Typically, an increase in rates leads to a decline in bond prices, prompting the central bank to take steps to prevent excessive drops in bond prices (and rising bond yields). According to the Nikkei, the Bank of Japan is coordinating to halt its current reduction of bond purchases after April 2027. This plan has garnered majority support from policy board members, and the central bank is in discussions with the government. Under the current plan, bond purchases will be reduced by 200 billion yen each quarter from January to March 2027, but it is being considered to maintain monthly bond purchases at 2.1 trillion yen starting in April of that year. This approach aims to raise interest rates to address inflation while simultaneously mitigating shocks to the bond market by pausing the reduction of bond purchases, thereby adjusting the pace of normalization. An increase in the policy rate generally raises short-term interest rates across the financial sector, while a reduction in bond purchases can exert upward pressure on long-term rates in the bond market. If both measures are aggressively pursued, bond yields could rise more rapidly, exacerbating market instability. Since 2013, the Bank of Japan has engaged in large-scale monetary easing, acquiring significant amounts of long-term government bonds. As a result, the central banks holdings in the bond market reached around 54% at one point in 2023. The Bank has been gradually reducing its bond purchases since August 2024 to restore market functionality, but recent inflation and fiscal expansion concerns have led to a surge in long-term yields, increasing instability in the bond market. In May, the yield on Japans 10-year government bonds briefly rose to around 2.8%, the highest level in nearly 29 and a half years. Nevertheless, halting the reduction of bond purchases does not mean the Bank of Japan is abandoning its path toward monetary policy normalization. As previously acquired bonds mature, the central banks bond holdings will continue to decrease. The Bank aims to respond to inflation through interest rate hikes while managing the pace of normalization to avoid exacerbating instability in the bond market. This upcoming meeting will serve as a significant test for the Bank of Japan as it navigates the challenges of a weak yen, rising prices, and instability in the bond market. The yen has recently fallen below the 160 yen per dollar mark for the first time in a month. While a rate hike could help alleviate pressure from a weaker yen and rising import prices, it also poses a burden by increasing mortgage rates for households and borrowing costs for businesses. Conversely, pausing the reduction of bond purchases may stabilize the bond market but could signal a delay in the normalization of monetary policy. Balancing inflation control with bond market stability is becoming increasingly challenging for the Bank of Japan. Additionally, if the Bank of Japan proceeds with a rate hike, tensions with the government of Sanae Takaichi, which is pursuing an expansionary fiscal policy, are likely to arise.* This article has been translated by AI. June 9, 2026 17:57 -
Bank of Japan Expected to Raise Interest Rate to 1% This Month, Highest in 31 Years The Bank of Japan is set to raise its policy interest rate to 1.0% during its monetary policy meeting this month. According to the Nihon Keizai Shimbun (Nikkei) on June 9, the Bank plans to make this decision at its monetary policy meeting scheduled for June 15-16, increasing the current rate from 0.75%. If approved, this would be the first rate hike since December of last year and the highest level since 1995. Nikkei reports that Governor Kazuo Ueda and the executive board are expected to propose the rate hike during the meeting, with the nine-member policy committee likely to approve it with a majority vote. Concerns are rising within the Bank regarding the potential for increased oil prices due to tensions in the Middle East, which could lead to broader price hikes across various goods. There is also an expectation that the underlying inflation rate, excluding temporary fluctuations, may rise. Excluding the impact of government subsidies for electricity and gas, the Banks consumer price index (CPI) rose 2.8% in April compared to the same month last year, up from a 2.5% increase in March. A Bank official told Nikkei, The pace at which companies are passing on costs is accelerating. If we miss the timing, we may be forced into a significant rate hike later on. Nikkei also noted that the assessment of limited economic downside risks from Middle East tensions is bolstering the case for a rate increase. There is a growing sentiment within the Bank that proactive measures are needed to address inflationary pressures. Earlier, Governor Ueda indicated the need to discuss the appropriateness of a rate hike even amid uncertainties in the Middle East during a speech on June 3, hinting at the possibility of an increase this month. However, in light of instability in the bond market, plans to reduce government bond purchases are expected to be moderated. The Bank is coordinating to halt its current quarterly reduction of bond purchases after April 2027. Under the current plan, the Bank will continue to reduce its bond purchases by 200 billion yen (approximately $1.9 billion) each quarter until January-March 2027, and then maintain monthly purchases of 2.1 trillion yen (approximately $19.9 billion) starting in April of that year. Recently, the Japanese bond market has shown instability due to concerns over inflation and fiscal expansion. In May, the yield on newly issued 10-year government bonds, a key indicator of long-term rates, briefly rose to around 2.8%, marking the highest level in 29 and a half years. Additionally, the yen has continued to weaken, surpassing the 160 yen per dollar mark for the first time in a month. If the Bank of Japan proceeds with the rate hike, it is expected to create policy friction with the government of Sanae Takaichi, which is pursuing an expansionary fiscal policy.* This article has been translated by AI. June 9, 2026 16:57 -
Hana Asset Management Launches Hyundai and Kia ETF Amid AI Focus Jensen Huang, CEO of NVIDIA, has declared that the next phase of AI is Physical AI. As we enter the era of Physical AI, South Korean companies with global manufacturing competitiveness, particularly Hyundai and Kia, are increasingly standing out in the market, said Kim Tae-woo, CEO of Hana Asset Management, during a press conference on June 9 in Seoul. Investor interest has recently shifted from major semiconductor stocks like Samsung Electronics and SK Hynix to the Hyundai Group. As Physical AI emerges as the next growth axis in the AI industry, the launch of exchange-traded funds (ETFs) featuring Hyundai and Kia is gaining momentum. On this day, Hana Asset Management launched the 1Q Hyundai Kia Bond Mixed 50 ETF. This product invests 25% each in Hyundai and Kia, totaling 50%, while the remaining 50% is allocated to government bonds and monetary stabilization securities with a maturity of six months or less. It tracks the KEDI Hyundai & Kia Bond Mixed 50 Index and has a total expense ratio of 0.10% per year. The structure of the ETF is also notable for targeting retirement pension investors. While the investment in risk assets is limited to 70% in retirement pension accounts, this product, as a second-generation bond mixed ETF reflecting retirement pension supervision regulations, is not subject to risk asset investment limits, allowing for a maximum 100% allocation within retirement pension accounts. Additionally, when investing alongside stock ETFs like 1Q 200 Active, the stock exposure in retirement pension accounts can be increased to as much as 85%. Kim Seung-hyun, head of the ETF and Quant Solutions Division, emphasized, At this point, the core of the AI wave is Physical AI. The Hyundai Group, with its global manufacturing competitiveness, particularly Hyundai and Kia, is at the center of this development. He further described the product as one that combines the advantages of stocks and bonds by investing in both companies and short-duration bonds. As the perception of Hyundai Group as a leading beneficiary of Physical AI spreads, competition among asset management firms to launch ETFs is intensifying. On the same day, Samsung Asset Management also launched the KODEX Hyundai Robotics Value Chain TOP3 Plus ETF, which includes Hyundai, Kia, Hyundai Mobis, Hyundai AutoEver, and Hyundai Glovis.* This article has been translated by AI. June 9, 2026 15:51 -
NICE Credit Rating Agency Receives Top Marks in Evaluation The Financial Investment Association announced on June 9 that NICE Credit Rating Agency received the highest evaluation in its 2026 Credit Rating Agency Capability Assessment conducted among three domestic credit rating agencies: Korea Corporate Rating, Korea Credit Rating, and NICE Credit Rating. The assessment was divided into two categories: Accuracy of Credit Ratings, which evaluates the accuracy of credit ratings, and Stability of Credit Ratings and Usefulness of Predictive Indicators, which assesses the stability of ratings and the usefulness of predictive indicators such as rating outlooks and monitoring. The evaluation combined quantitative assessments (50%) using metrics like default rates and rating maintenance rates with qualitative assessments (50%) based on surveys of market experts. In the accuracy category, NICE Credit Rating received the highest scores in both quantitative and qualitative evaluations. According to the Financial Investment Association, there were no defaults among investment-grade companies last year, and NICE Credit Rating recorded the lowest average cumulative default rate and annual default rate. In the qualitative assessment, NICE Credit Rating scored 3.89 out of 5, surpassing Korea Corporate Rating (3.80) and Korea Credit Rating (3.76). NICE Credit Rating also ranked first in the overall evaluation for the stability of credit ratings and the usefulness of predictive indicators. In the stability category, NICE Credit Rating received the highest ratings in both quantitative and qualitative evaluations. In the quantitative assessment of usefulness, Korea Corporate Rating and Korea Credit Rating achieved a 100% alignment rate between their rating outlooks and actual credit rating changes over the past three and five years. However, in the overall results, including qualitative assessments, NICE Credit Rating received the highest evaluation. The overall trust in credit rating capabilities among market participants, including credit analysts and bond managers, remained steady at an average score of 3.82 out of 5, the same as last year. However, satisfaction regarding stability slightly decreased compared to the previous year due to increased volatility in rating assessments. In a separate survey regarding investor concerns, NICE Credit Rating was highly rated for the appropriateness and diversity of the information provided, market communication efforts, and overall market contribution. Conversely, Korea Corporate Rating received the highest score for the usefulness of its credit rating reports. Kang Kyung-hoon, the evaluation committee chair, stated, In the current situation of heightened external uncertainties due to global interest rate fluctuations and conflicts in the Middle East, it is crucial to protect investors through accurate information. I hope credit rating agencies contribute to the stability of the capital market by providing transparent and timely evaluations.* This article has been translated by AI. June 9, 2026 14:00 -
Woori Bank's London Trading Center Receives UK Approval, Set to Open This Month Woori Bank announced that its London Trading Center has received approval from the UK government, allowing it to support foreign investment in Korean won. The center aims to expand its non-interest income base by connecting local capital markets with the domestic financial market.On June 9, Woori Bank revealed that the London Trading Center has obtained the necessary licenses for client-facing derivatives trading and securities management from UK financial authorities.To enhance accessibility for foreign investors to the domestic foreign exchange and capital markets, Woori Bank began establishing the London Trading Center in January of last year. The application was submitted to UK authorities in July of the same year, and final approval was granted approximately ten months later.The London Trading Center plans to offer package trading that combines Korean Treasury bond investments with currency hedging for foreign investors. It will also provide foreign exchange and interest rate derivative services to Korean companies operating in the region. The center is expected to commence operations later this month after completing internal procedures.A Woori Bank official stated, With the approval of the London Trading Center, we have created an environment where foreign investors can more easily invest in domestic won assets. We will serve as a bridge to help foreign investors invest in domestic won assets conveniently and efficiently.* This article has been translated by AI. June 9, 2026 09:33