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KOSPI Surges 11% in a Week, Approaching 7000 Mark The KOSPI index has risen for five consecutive trading days, nearing the 7000 mark. Next week, the domestic stock market is expected to be influenced by semiconductor earnings and foreign investment trends. Analysts believe that the KOSPIs valuation normalization will continue, supported by easing inflation concerns in the U.S. and strong performances from AI infrastructure companies. However, profit-taking from the recent surge and geopolitical tensions in the Middle East are seen as potential variables.According to the Korea Exchange, the KOSPI closed at 6977.94, up 164.60 points (2.42%) from the previous trading day. Over the past week, it has jumped 719.17 points from 6258.77, marking an increase of 11.49%.The upward trend accelerated towards the end of the week. The KOSPI rose by 0.65% on August 10, 0.73% on August 11, and then surged by 3.68% and 3.56% on August 12 and 13, respectively. It continued to rise by 2.42% on August 14, marking five consecutive days of gains.Foreign investors have contributed to the indexs rise, with net purchases of 3.384 trillion won in the securities market on August 14, marking four consecutive days of net buying. In contrast, individual and institutional investors sold a net 1.9847 trillion won and 1.1269 trillion won, respectively, as they took profits.The KOSDAQ also saw an 8.24% increase this week, rising from 798.81 on August 7 to 864.65 on August 14. However, after a 6.97% surge on August 10, the gains from August 11 to 14 were limited to 0.12% to 0.39%, indicating a slowdown in the upward momentum following a sharp rebound in oversold stocks.Market analysts suggest that it may be time to refocus on large-cap stocks in the KOSPI following the short-term rebound from oversold conditions. Earnings estimates for the KOSPI continue to rise, and foreign capital is flowing into major semiconductor stocks like Samsung Electronics and SK Hynix.Investor sentiment surrounding semiconductors is also recovering quickly. South Koreas semiconductor exports from August 1 to 10 reached $10 billion, a 155.4% increase compared to the same period last year, with DRAM export prices continuing to rise. Additionally, strong performances and investment expansions from U.S. AI infrastructure companies like CoreWeave and Supermicro have alleviated concerns about demand in the AI sector.Given these improvements, the KOSPIs valuation burden is still considered low. The KOSPIs 12-month forward earnings per share (EPS) has increased to 1218.3 points, up from 1105.1 points at the end of June. However, the 12-month forward price-to-earnings ratio (PER) remains at around 5.6 times, indicating that the stock prices have not yet fully reflected the upward revisions in earnings forecasts.Na Jeong-hwan, a researcher at NH Investment & Securities, stated, As concerns about AI demand ease, the market is entering a recovery phase where it re-reflects earnings. Given that IT accounts for 77.3% of KOSPI net income, it is essential to maintain a focus on the IT sector.Lee Kyung-min, a researcher at Daishin Securities, noted, If concerns about the semiconductor industry subside and easing interest rate pressures are added, the KOSPIs valuation normalization will continue. In the short term, it is crucial to see if the index can stabilize between 6500 and 6800, as doing so could open up possibilities for further index level increases.* This article has been translated by AI. August 15, 2026 08: -
U.S. 30-Year Treasury Yield Hits 5.22%, Highest in 25 Years The yield on U.S. 30-year Treasury bonds has surged to its highest level since 2001. Concerns over rapidly increasing government debt and persistent inflation are driving long-term rates higher.On August 13, the yield for a $25 billion auction of 30-year bonds was set at 5.22%, the highest since 2001. This marks an increase of 0.16 percentage points from last month’s 5.06% and a rise of 0.31 percentage points compared to the 4.91% yield just before Donald Trump took office in January of last year.The bid-to-cover ratio was 2.39, exceeding recent averages. While demand for Treasury bonds remains steady, investors are demanding higher yields for longer-term loans.The yield on 10-year bonds also rose. In a $42 billion auction held the day before, the yield reached 4.69%, the highest since 2007.The increase in long-term rates is largely attributed to the rapid growth of government debt, which is nearing $40 trillion. The federal government’s debt held by the public has risen to 100.2% of GDP as of the end of the first quarter, marking the first time since the immediate post-World War II era, excluding a brief period during the COVID-19 pandemic when it exceeded 100%.The Congressional Budget Office (CBO) projects that this ratio will rise to 108% by 2030, surpassing the previous record of 106% set after World War II.High inflation is also a concern. The Consumer Price Index (CPI) for July rose 3.4% compared to the same month last year, significantly above the Federal Reserves inflation target of 2%. Energy price volatility due to the Iran conflict could further exacerbate inflationary pressures.Gennadiy Goldberg, head of U.S. interest rate strategy at TD Securities, commented, “The results of this auction show that while there is still demand for Treasuries, investors are seeking higher yields.”* This article has been translated by AI. August 14, 2026 13:
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SK hynix surges as KOSPI extends fifth-day rally SEOUL, August 14 (AJP) - Seoul's memory trade ran into a fifth straight session Friday, with SK hynix jumping more than 5 percent after a U.S. flash memory maker's long-term margin targets pushed investors to reprice the storage cycle. The KOSPI traded at 6,944.14, up 1.9 percent, after pushing back above the 7,000 line early in the session and then slipping under it. The index added 130.80 points. Foreigners bought a net 572.8 billion won ($404.3 million) of Seoul shares, while individuals sold a net 321.0 billion won ($226.6 million) and institutions a net 233.4 billion won ($164.7 million). SK hynix traded at 1,682,000 won ($1,187), up 5.6 percent. Samsung Electronics rose 0.9 percent to 270,500 won ($191), a fraction of the move in its smaller rival, leaving the gap between the two memory makers as wide as it has been during this rally. The trigger was SanDisk's investor day in the United States, where the company set a target of roughly 80 percent non-GAAP gross margins from fiscal 2028 through fiscal 2030 and disclosed supply agreements with eight customers covering about two-thirds of bit shipments by fiscal 2028. SanDisk shares closed up about 13.7 percent Thursday, and SK hynix's U.S.-listed shares rose about 7 percent alongside them. Traders in Seoul read the NAND flash targets as a signal that pricing power in memory is holding rather than peaking, which lands more directly on SK hynix than on the more diversified Samsung Electronics. Softer U.S. inflation data gave the rally a second leg. Consumer prices rose 0.1 percent in July and producer prices were flat, readings that trimmed market odds of a Federal Reserve rate increase at the September meeting and sent the S&P 500 to a record. The bid broadened past chips. Hyundai Motor climbed 6.8 percent to 447,000 won ($315) and Kia rose 3.1 percent to 141,700 won ($100), while SK square gained 3.2 percent to 1,153,000 won ($814). Not everything joined. Hanwha Aerospace fell 4.2 percent to 1,135,000 won ($801), the sharpest decline among the largest listings. The KOSDAQ, the secondary market for smaller and technology companies, edged up 0.2 percent to 863.03, well behind the main index in Seoul. In Tokyo, the Nikkei 225 traded at 69,374.53, up 1.6 percent. The won traded at 1,416.80 per dollar, marginally stronger than Thursday. August 14, 2026 10: -
Government Reports Continued Economic Recovery Amid Ongoing Middle East Risks The government has recently assessed that South Koreas economy is showing signs of improvement, particularly in exports and consumption. However, it noted that challenges related to high prices and employment difficulties for vulnerable groups persist due to the ongoing conflict in the Middle East.The Ministry of Finance released its Recent Economic Trends (Green Book) for August on the 14th, stating, Our economy has seen a significant increase in exports and improvements in domestic consumption, reinforcing the trend of economic recovery. However, the pressure of rising prices due to high oil prices from the Middle East and the difficult employment conditions for vulnerable groups continue to burden the public.Exports surged by 62.8% year-on-year last month, largely driven by strong performance in semiconductors, a key export item. The total export value reached $98.89 billion, with increases also noted in the exports of computers and ships. The average daily export value in July was $4.12 billion, marking a 69.6% increase compared to the same month last year.Production saw steady growth across both the mining and service sectors. Overall industrial production rose by 2.3% in June compared to the previous month, with mining (6.4%), construction (4.1%), and services (0.7%) contributing to the overall increase. However, public administration experienced a decline of 4.0%.Consumer sentiment also showed signs of improvement. Private consumption in the second quarter increased by 0.4% compared to the previous quarter and by 2.5% year-on-year. Retail sales in June rose by 2.7% from the previous month, driven by increases in durable goods (12.6%) and non-durable goods (0.2%).A Ministry of Finance official commented, While the rise in the consumer sentiment index and retail sales in July are positive indicators, the decline in domestic sales of locally produced cars may act as a negative factor.In June, the current account recorded a surplus of $49.73 billion, continuing the trend of a trade surplus. The service account saw a reduction in its deficit as the travel balance recorded surpluses for two consecutive months. The income account surplus expanded due to an increase in dividend income.Despite the impact of the Middle East conflict, consumer prices, which had fluctuated around 3%, showed some stabilization. Last month, consumer prices rose by 2.8% compared to a year earlier. The government attributed the slight decrease from the previous month to measures such as the maximum price system for petroleum products, which helped curb the rise in oil prices. The core inflation index, excluding food and energy, increased by 2.6% compared to the same period last year, driven by rising personal services.As of July, the number of employed individuals increased by 108,000 compared to the same month last year, marking two consecutive months of growth. However, the youth demographic and sectors such as manufacturing and construction showed signs of weakness. A Ministry of Finance official explained, Changes in hiring practices have led to a preference for experienced hires over large-scale public recruitment, making it difficult for young people entering the labor market for the first time. Additionally, structural challenges such as automation in manufacturing are contributing to these difficulties.The won-dollar exchange rate stood at 1,424.0 won at the end of July, showing a decline from the end of the previous month.However, the financial market could not escape a downward trend. The KOSPI closed at 6,595.45, down 22.19 points from the end of the previous month, while the KOSDAQ fell by 21.44 points to 719.76.A Ministry of Finance official stated, The global economy continues to show moderate growth, but uncertainties related to the Middle East conflict and U.S. tariff measures remain. We will ensure the management of supply and demand for key items and prioritize the safety of public livelihoods to minimize the impact of the Middle East conflict.* This article has been translated by AI. August 14, 2026 10:
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Korea's July import prices fall as stronger won masks cost rebound SEOUL, August 14 (AJP) - South Korea’s import prices eased for the second straight month in July, backed by a stronger won and lower oil prices and further flagging a disinflation path, Bank of Korea data showed Friday. The won-denominated import price index stood at 160.09, down 1.0 percent from June after a revised 4.2 percent decline the previous month. The year-on-year rate nevertheless remained in double digits at 18.7 percent. Measured in contract currencies, however, import prices rose 0.9 percent from June and 10.4 percent from a year earlier. The divergence suggests overseas procurement costs were rising again, but the stronger won prevented the increase from appearing in the headline index most relevant to domestic prices. The average won-dollar exchange rate fell to 1,497.43 in July from 1,527.30 in June, meaning the won strengthened 2.0 percent on a monthly-average basis, though it remained 8.9 percent weaker than a year earlier. The exchange rate fell as low as 1,418.0 won during daytime trading on the morning of July 31, marking the won’s strongest level since October 2025. The won’s advance also coincided with market expectations that part of the $26.5 billion raised through SK hynix’s Nasdaq American depositary receipt offering, completed on July 14, would eventually be converted into won for domestic investment, adding to anticipated dollar supply. The won stood at 1,419.4 per dollar at the 3:30 p.m. close in Seoul on Aug. 13, down nearly 80 won from its July average despite weakening 3.7 won from the previous session. Lower oil prices reinforced the currency effect, with Dubai crude averaging $76.75 a barrel in July, down 3.4 percent from June but still 8.3 percent higher than a year earlier. Raw-material import prices rose 0.8 percent as a 24.8 percent jump in liquefied natural gas outweighed a 4.8 percent decline in crude oil. Intermediate-goods prices fell 2.2 percent, led by coal and petroleum products, primary metals and chemicals, while capital-goods prices declined 1.8 percent. Consumer goods edged down 0.1 percent, but the details were mixed. Durable and semi-durable goods rose 1.3 percent while nondurables fell 1.4 percent, with mobile phones up 10.2 percent and beef down 6.0 percent. Food-related pressures were also uneven, with agricultural and marine products rising 2.2 percent and 3.8 percent, respectively, while livestock products fell 6.3 percent and processed food dropped 3.2 percent. The softer won-based import reading could reduce pipeline pressure on consumer prices, which fell 0.2 percent from June and rose 2.8 percent from a year earlier in July, easing from 3.2 percent annual inflation in June. The signal is not uniformly disinflationary, however, because import prices remained far above year-earlier levels and core consumer inflation excluding food and energy edged up to 2.6 percent from 2.5 percent. Export prices moved in the opposite direction, rising 1.0 percent from June and 49.1 percent from a year earlier, the fastest annual increase since March 1998. Contract-currency export prices rose 3.0 percent on the month and 37.8 percent on the year, showing that the advance was not merely an exchange-rate effect. Prices for computer, electronic and optical products climbed 4.8 percent from June and 122.3 percent from a year earlier, with DRAM prices up 6.6 percent on the month and 270.3 percent on the year. Export volumes increased 20.0 percent from a year earlier and export value jumped 64.2 percent, while import volume and value rose 14.7 percent and 25.8 percent, respectively. The net barter terms of trade improved 24.7 percent from a year earlier and the income terms of trade rose 49.7 percent as semiconductor prices and shipment volumes continued to outpace import costs. July’s decline therefore looks less like broad imported disinflation than a currency cushion over still-firm external costs. For households, the durability of that relief will depend on whether the won remains firm and energy prices stay contained after the influence of temporary corporate dollar flows fades. __________________________________________________________________________________ AJP Takeaways • South Korea’s won-based import prices fell 1.0 percent in July for a second consecutive monthly decline, even as contract-currency prices rose 0.9 percent, showing that the stronger won masked an underlying rebound in overseas costs. • The won strengthened 2.0 percent on a monthly-average basis, touched 1,418.0 per dollar on July 31 and stood at 1,419.4 at the Aug. 13 daytime close, with anticipated conversion of part of SK hynix’s ADR proceeds adding to dollar supply. • Lower import costs could ease future consumer inflation, but import prices remained 18.7 percent higher than a year earlier as semiconductor-driven export prices surged 49.1 percent, their fastest increase since March 1998. August 14, 2026 09: -
KOSPI Eyes Fifth Consecutive Day of Gains Amid Strong Semiconductor Stocks The KOSPI is poised to continue its upward trend for a fifth consecutive trading day on August 14, buoyed by easing inflation pressures in the U.S. and strong performance in semiconductor stocks. Concerns over additional interest rate hikes by the U.S. Federal Reserve have subsided, with both Samsung Electronics and SK Hynix showing gains in pre-market trading.According to NextTrade, as of 8:30 a.m., SK Hynix shares were trading at 1,682,000 won, up 89,000 won (5.59%) from the previous trading day. Samsung Electronics also saw an increase of 7,500 won (2.80%), reaching 275,500 won. The positive sentiment surrounding domestic semiconductor stocks is attributed to the strong performance of semiconductor and tech stocks in the U.S. markets overnight.U.S. stock markets closed higher, driven by lower-than-expected producer price index (PPI) data. On August 13 (local time), the Dow Jones Industrial Average rose by 69.72 points (0.13%) to close at 53,839.99. The S&P 500 index gained 50.49 points (0.65%), reaching a record closing high of 7,798.99. The tech-heavy Nasdaq Composite also increased by 214.54 points (0.81%), finishing at 26,803.03.The stability in both consumer and producer prices has alleviated fears of further interest rate hikes by the Fed, boosting investor sentiment. The U.S. PPI for July showed no change from the previous month, falling short of the market expectation of a 0.2% increase. The yield on the 10-year U.S. Treasury note dropped by about 4.7 basis points to 4.645%.With the easing of interest rate pressures, buying interest in semiconductor stocks has surged. SanDisk saw a significant jump of 13.67%, while SK Hynixs American Depositary Receipts (ADRs) rose by 7.29%, and Micron increased by 4.23%. Nvidia also gained 0.54%. However, the Philadelphia Semiconductor Index, which had risen by as much as 2.46% during the day, saw its gains reduced to 0.46% due to profit-taking.Attention is now focused on whether the KOSPI can maintain its upward momentum, particularly with Samsung Electronics and SK Hynix leading the charge. Han Ji-young, a researcher at Kiwoom Securities, noted, This week’s confirmation of strong demand for AI infrastructure, along with reduced concerns over a September rate hike by the Fed and a shift to net buying by foreign investors, has driven the KOSPIs strength, adding that the performance gap with the KOSDAQ, which lagged last week, has narrowed.He cautioned that there may be some adjustments due to profit-taking pressures but expressed optimism, stating, Considering the improved market resilience and quality of supply and demand compared to the past, the market is likely to continue on a recovery path, consistently raising its lows.* This article has been translated by AI. August 14, 2026 08:
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U.S. Producer Prices Fall Short of Expectations, Boosting S&P 500 to Record High U.S. producer prices came in lower than expected, leading to a broad rise in the New York stock market. With inflation and interest rate pressures easing, technology and memory semiconductor stocks surged, pushing the S&P 500 index to a record high.On August 13, the Dow Jones Industrial Average closed up 69.72 points (0.13%) at 53,839.99. The S&P 500 index rose 50.49 points (0.65%) to finish at 7,798.99, marking its highest closing ever. The tech-heavy Nasdaq Composite also gained 214.54 points (0.81%), closing at 26,803.03.The market rally was driven by a lower-than-expected Producer Price Index (PPI). According to the U.S. Labor Department, the PPI for July remained unchanged from the previous month, falling short of the market forecast of a 0.2% increase. Year-over-year, the PPI rose 4.7%, down from 5.5% in June.Following a stable consumer price report, the PPIs unexpected stability has eased concerns about further interest rate hikes from the Federal Reserve. The yield on the 10-year U.S. Treasury note fell to 4.645%, down about 4.7 basis points from the previous day.Among semiconductor stocks, memory companies saw significant gains. SanDisk surged 13.7% after announcing a long-term growth outlook, driven by expectations of increased memory demand due to the rise of artificial intelligence (AI).Micron closed up 4.21% at $949.83, while SK Hynixs American Depositary Receipts (ADR) jumped 7.23% to $165.67, marking a second consecutive day of substantial gains after rising over 9% the previous day.NVIDIA rose 0.54%, and major tech stocks like Meta Platforms and Microsoft also contributed to the indexs increase.In contrast, Cisco saw its shares drop more than 8% following its earnings report, which failed to meet market expectations.A decline in international oil prices also bolstered investor sentiment. West Texas Intermediate (WTI) crude fell 2.4% to $81.25 per barrel, while Brent crude dropped 2.15% to $87.07. The recent pullback in oil prices has somewhat alleviated concerns about rising inflation.After the market close, semiconductor equipment maker Applied Materials reported earnings that exceeded market expectations for the quarter and next quarters outlook. However, the results were deemed insufficient to meet the heightened expectations for AI and semiconductor investments, leading to weakness in after-hours trading.* This article has been translated by AI. August 14, 2026 07:
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U.S. Producer Prices Remain Unchanged in July, Falling Short of Expectations U.S. producer prices remained unchanged in July, falling short of market expectations.According to the Bureau of Labor Statistics (BLS) on August 13, the Producer Price Index (PPI) for July showed no change from the previous month, while analysts had anticipated a 0.2% increase.The PPI measures price changes received by producers for goods and services, serving as a leading indicator for future inflation trends as it can influence consumer prices with a lag. The lower-than-expected PPI suggests that price pressures at the production level were weaker than anticipated.This announcement follows the release of the Consumer Price Index (CPI) by the BLS on August 12.The CPI for July rose 3.4% compared to the same period last year, a slight decrease from Junes 3.5% increase, aligning with market expectations. Month-over-month, the CPI increased by 0.1%.* This article has been translated by AI. August 13, 2026 21:
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Chip boom masks Korea's demand-led disinflation risk SEOUL, August 13 (AJP) - Before U.S. inflation eased in July, South Korea's data were already flashing signs of a disinflationary turn, as sluggish consumption weakened the transmission of strong chip-led growth into broader price pressure and defied expectations that inflation would accelerate further in the second half. The consumer price index stood at 119.77 in July, up 2.8 percent from a year earlier but easing from 3.2 percent in June, bringing inflation below 3 percent for the first time in three months. The living-cost index slowed to 2.5 percent from 3.4 percent, fresh-food prices fell 2.3 percent and petroleum-product inflation eased to 15.5 percent from 24.7 percent. The government estimated that its petroleum-price ceiling lowered July inflation by about 0.3 percentage point, suggesting that part of the headline moderation reflected easing energy pressure and administrative intervention. The divide between production and consumption was also visible in the second quarter, when all-industry output rose 0.9 percent from the previous quarter while retail sales fell 1.7 percent. Core inflation excluding food and energy, however, edged up to 2.6 percent from 2.5 percent, its highest reading since December 2023. That makes it too early to declare a broad disinflationary shift. Disinflation means prices are rising more slowly rather than falling outright. For Korea, the concern is that weaker household demand could increasingly become the force driving that slowdown. The structural disconnect was already flagged in a Bank of Korea report on the inflationary effects of sectoral growth disparities released on Feb. 27. In comments accompanying the report, Jeong Won-seok, a deputy director in the BOK's Research Department, said income gains among higher-income households were being absorbed more by savings and asset accumulation, weakening the channel from income to consumption and ultimately inflation. The BOK estimated that the marginal propensity to consume among households in the top two income quintiles fell to 0.07 in 2022 and 2023 from 0.11 in 2020 and 2021. That compared with 0.17 for middle-income households and 0.19 for lower-income households. The same study estimated that even if overall economic growth reaches around 2 percent this year, growth excluding information-technology manufacturing could remain in the low-to-mid 1 percent range. That gets to the heart of Korea's inflation puzzle. When income and growth are concentrated among richer households and a handful of chipmakers, strong headline growth generates less consumption — and therefore less inflation pressure — across the broader economy. "Employment is not increasing, while bonuses are often put into retirement accounts rather than spent immediately, leaving little wage-driven inflationary pressure," Park Jeong-woo, an economist at Nomura Securities, said at a media briefing in Seoul on June 12. Park forecast that supply-driven inflation would peak around August or September before easing and that the investment spillover from the chip boom would weaken after the third quarter. That would leave domestic demand more exposed if semiconductors make a smaller contribution to growth, potentially stripping away the buffer that has so far masked weakness across much of the rest of the economy. A similar moderation emerged in the United States, where annual consumer inflation eased to 3.4 percent in July from 3.5 percent and core inflation slowed to 2.5 percent from 2.6 percent. U.S. consumer prices rose just 0.1 percent from June and core prices gained 0.2 percent, as falling gasoline prices offset part of the remaining energy pressure. Yelena Shulyatyeva, senior U.S. economist at The Conference Board, said in an Aug. 7 labor-market assessment that average hourly earnings had moved closer to their pre-pandemic pace, underscoring the absence of meaningful wage-inflation pressure. The U.S. and Korean economies are not identical, but both show signs that supply shocks are producing fewer second-round effects through wages and household spending. There are reasons, however, to be cautious about reading too much into Korea's July numbers. Kim Sung-soo, a fixed-income analyst at Hanwha Investment & Securities, said in July that inflation was likely to remain elevated for another six months to a year. The BOK also expects headline inflation to rise in August because of a base effect from last year's mobile-service discounts and sees a risk that earlier cost shocks will continue to pass through into core consumer prices. The decisive test will therefore be whether core and service inflation weaken alongside consumption and employment once temporary energy and base effects fade. If they do, July's moderation could look less like a one-off reprieve and more like an early warning of demand-led disinflation. ___________________________________________________________________________________ AJP Takeaways • Korea's headline inflation slowed to 2.8 percent in July and its living-cost index eased to 2.5 percent, but core inflation rose to 2.6 percent. • BOK research and Nomura's analysis suggest Korea's chip-led growth is generating limited spillovers into household consumption, wages and broader consumer-price pressure. • U.S. inflation also moderated in July, but energy risks and sticky Korean core inflation mean demand-led disinflation has not yet been firmly established. August 13, 2026 18: -
Korea still looks cheap on paper. Why doesn't it feel that way? SEOUL, August 13 (AJP) - South Korea can still look remarkably cheap to someone arriving from New York or Berlin. For Koreans earning and spending in won, it increasingly does not feel that way. Years of rising prices have made more spending discretionary as household incomes struggle to keep pace, squeezing what remains after necessities. Yet for visitors earning dollars or euros, a restaurant bill or cab fare in Seoul can still look like a bargain. A three-course meal for two at a mid-range restaurant costs about $140 in New York, compared with 92,500 won ($65) in Seoul, according to Numbeo, the crowdsourced global cost-of-living database. Numbeo puts a mile of standard taxi travel at about $3.50 in New York against 1,327 won in Seoul, excluding the starting fare. Miki Vranjes is spending a month in Korea partly because of that price appeal. "You should see how expensive things are in Germany," he said. "The price for anything in Germany is insanely high." Fresh from her previous stop in Tokyo, Cortney Haze sees less of a bargain. "I don't think I find prices for anything in Korea extraordinarily cheap compared to the United States or even Japan, to be completely honest," she said. At some restaurants, she noted, burgers can run above $10. The exchange rate explains part of the divide. The won weakened sharply during the first half of the year, with the dollar-won rate averaging above 1,530 around the end of June. It has since recovered to around 1,422 won per dollar, strengthening roughly 7 percent from that level. Even after the rebound, the exchange rate continues to make many Korean prices look relatively low when converted into dollars. That distinction — cheap after currency conversion versus affordable on a Korean paycheck — runs through the numbers. The Middle East war added another burst of inflation this spring as energy costs surged. OECD-wide inflation climbed to 4.6 percent in May as energy inflation reached 15.8 percent, before headline inflation eased to 4.2 percent in June. The OECD has said the conflict has pushed up energy and other input prices while squeezing real incomes. Korea's consumer inflation slowed to 2.8 percent in July from 3.2 percent in June, helped by falling petroleum prices. U.S. inflation similarly eased to 3.4 percent in July from 3.5 percent in June and 4.2 percent in May. Germany moved the other way last month, with inflation rebounding to 2.8 percent in July from 2.3 percent in June. Cheap compared with where? The OECD's comparative price data broadly support the impression that Korea remains inexpensive relative to many advanced economies. Its monthly comparative price levels measure the cost of a representative basket of consumer goods and services using purchasing-power estimates and market exchange rates. That means currency swings can change the comparison even when domestic sticker prices do not. Rebasing the OECD's May figures to make each comparison country equal to 100 puts Korea at about 71 against Germany and 58 against the United States. Against Japan, Korea stands much closer, at about 93. That makes Haze's reaction understandable. Korea looks substantially cheaper beside Germany or the United States, but much less so after a stop in Japan. Individual purchases make the point even more vividly. A Big Mac in Korea costs 5,700 won, after McDonald's Korea raised prices in February. In Japan, McDonald's currently lists one from 500 yen. Korea's Big Mac is therefore actually more expensive in dollar terms at current exchange rates — roughly $4 versus a little over $3 in Japan. Taxi fares tell a different story. A standard Seoul taxi starts at 4,800 won for the first 1.6 kilometers, then adds 100 won for every 131 meters. In Berlin, the base fare is 4.30 euros, followed by 2.80 euros per kilometer for the first three kilometers. When income does not keep up Lee Dong-hyun, a 35-year-old office worker in Seoul, said a familiar joke among his friends — that prices rise every year while salaries barely move — has become increasingly difficult to laugh about. "I feel like I work all day at the office, doing a lot but somehow accomplishing nothing, and at the end of it there's nothing left in my bank account," he said. His routine is mostly work and home, with money going to meals, coffee, dinner and exercise. Even without large purchases, Lee estimates he spends around 2 million won a month. He has considered cooking more often, but groceries do not feel particularly cheap either. Official household data explain why the squeeze persists even as headline inflation eases. Average monthly household income rose 2.4 percent from a year earlier to 5.481 million won in the first quarter. After inflation, real income increased just 0.4 percent. Consumption spending, meanwhile, jumped 5.3 percent to 3.105 million won, or 3.1 percent in real terms. The average household surplus fell 3.1 percent to 1.239 million won. And the latest wage data suggest the squeeze has not disappeared. Real wages fell 1.4 percent in May, the second consecutive monthly decline, as inflation outpaced nominal pay growth. That is why slowing inflation does not necessarily feel like falling prices. It means prices are rising more slowly from levels that households already regard as high. For a visitor converting dollars or euros, Korea can therefore remain relatively inexpensive. For a Korean worker measuring those same prices against a paycheck, the arithmetic can look very different. AJP Takeaways • Korea remains considerably cheaper than the U.S. or Germany on broad international price comparisons, although its gap with Japan is much narrower. • Exchange rates amplify Korea's apparent cheapness for foreign visitors, even after the won's roughly 7 percent rebound from its late-June lows. • Korean households face a different equation: real household income rose just 0.4 percent in the first quarter while consumption spending climbed 5.3 percent and household surpluses fell. August 13, 2026 17: -
KOSPI recovers above 6,800 as foreign buying fuels broader tech rally SEOUL, August 13 (AJP) - South Korean stocks jumped more than 3 percent on Thursday as foreign investors returned to the market, extending the rally for a fourth straight session, with an artificial intelligence (AI)-driven rebound spreading beyond Samsung Electronics and SK hynix to chip equipment makers and other technology shares. The benchmark KOSPI closed at 6,813.34, up 234.30 points or 3.56 percent from the previous session. The index climbed as high as 6,895.63 during the day before paring some gains, but recovered to close above 6,800 for the first time in about three weeks. The rally spread beyond the country's two biggest chipmakers, though most of the gains still came from tech stocks and companies linked to the semiconductor supply chain. Electronic equipment and devices led KOSPI with a 9.28 percent gain, while semiconductors and semiconductor equipment rose 5.15 percent. Venture investment firms gained 5.91 percent, followed by aerospace and defense at 3.30 percent and wireless communications services at 2.55 percent. Among major technology stocks, Samsung Electronics closed 4.89 percent higher at 268,000 won, while SK hynix gained 5.92 percent to 1,593,000 won. SK Square jumped 9.08 percent to 1,117,000 won. Electronic components maker Samsung Electro-Mechanics surged 12.58 percent to 1,503,000 won after global investment bank Morgan Stanley named it its top pick among Korean technology stocks, citing growing demand and tighter supplies of multilayer ceramic capacitors or MLCCs, tiny components that help regulate power in AI servers. The gains across chipmakers, equipment producers and component suppliers showed the rally extending further into the semiconductor and AI hardware supply chain. But the buying remained largely driven by foreign and institutional investors rather than retail investors. Foreign investors bought a net 2.11 trillion won (US$1.49 billion) of KOSPI shares, while institutions added 681.7 billion won. Retail investors sold a net 2.74 trillion won, taking the other side of Thursday's rally. The return of foreign buying came amid improving global market sentiment. AI infrastructure stocks rallied sharply in the U.S. the previous day, with CoreWeave surging 19.28 percent and Super Micro Computer jumping 19.02 percent amid continued optimism over demand for AI computing infrastructure. Micron Technology gained 4.92 percent, helping lift the Philadelphia Semiconductor Index 2.49 percent. U.S. inflation data also helped support risk sentiment. Consumer prices rose 3.4 percent in July from a year earlier, slowing from 3.5 percent in June, while core inflation eased to 2.5 percent from 2.6 percent. The rally was much weaker on the KOSDAQ, where investor flows told a different story. The junior index closed just 0.29 percent higher at 861.37 after swinging between 853.09 and 870.96 during the session. Retail investors led the buying, purchasing a net 257.1 billion won, while foreign and institutional investors sold 136.3 billion won and 115.8 billion won, respectively. The modest gain came as the KOSDAQ faced tighter regulations, with dozens of companies placed under watch for failing to meet stricter minimum market capitalization requirements. But the tepid gain did little to dampen semiconductor-related stocks, which remained among the stronger performers. Chip equipment maker Jusung Engineering climbed 3.05 percent to 179,300 won, while Wonik IPS jumped 7.62 percent to 120,000 won. Robot maker Rainbow Robotics gained 1.43 percent to 497,000 won. The Korean won weakened slightly despite the stock rally, trading at 1,423.50 won against the U.S. dollar, compared with 1,415.70 won in the previous session. Other major Asian markets also made similar moves, with Japan's Nikkei 225 rising 1.16 percent to 68,308.59, supported by chip stocks and a stronger corporate earnings outlook as softer U.S. inflation reduced expectations of a Federal Reserve rate hike in September. China's Shanghai Composite fell 0.50 percent to 3,926.96, while Hong Kong's Hang Seng Index slipped 0.25 percent to 25,377.03. AJP Takeaways: - South Korea's benchmark KOSPI closed 3.56 percent higher at 6,813.34 on Aug. 13, 2026, reclaiming the 6,800 level as foreign investors returned to the market. - Foreign investors bought a net 2.11 trillion won ($1.49 billion) of KOSPI shares, while institutional investors purchased 681.7 billion won and retail investors sold 2.74 trillion won. - The rally spread beyond Samsung Electronics and SK hynix into the broader semiconductor and AI hardware supply chain, with Samsung Electronics rising 4.89 percent, SK hynix 5.92 percent and Samsung Electro-Mechanics 12.58 percent. - Samsung Electro-Mechanics surged after global investment bank Morgan Stanley named it its top pick among Korean technology stocks, citing growing demand and tighter supplies of multilayer ceramic capacitors used in AI servers. - South Korea's KOSDAQ gained a more modest 0.29 percent to 861.37 on Aug. 13, 2026, with retail investors buying a net 257.1 billion won as foreign and institutional investors remained net sellers. - South Korean technology shares were supported by gains in U.S. AI infrastructure stocks and softer U.S. inflation data, with July 2026 consumer prices rising 3.4 percent year on year, down from 3.5 percent in June. 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Japan's Government Supports Early BOJ Rate Hike Amid Yen Weakness The Japanese government has shifted to a supportive stance for an early interest rate hike by the Bank of Japan (BOJ), despite ongoing yen depreciation, according to a report by Bloomberg on August 13, citing sources. The Takaichi government is reportedly backing the BOJs early rate increase, with September or October being the most likely timeframe for the next hike. Prior to the BOJs monetary policy meeting on July 31, the government conveyed to BOJ Governor Kazuo Ueda that hawkish remarks would be acceptable during a press conference, according to a source. In fact, during the BOJs monetary policy meeting last month, the short-term policy rate was held steady at 1%. However, Governor Ueda later indicated the importance of considering the risk of inflation overshooting, suggesting the possibility of future rate hikes. On the same day, the U.S. and Japan conducted a coordinated intervention to buy yen, the first such action since 1998. Recently, officials from the Takaichi government have emphasized the independence of the BOJ, effectively lending support to the idea of a rate hike. Economic and Fiscal Policy Minister Minoru Kikuichi stated on August 10, We respect the independence of the Bank of Japan, while the Prime Ministers Office reiterated via email that decisions on specific monetary policy measures, such as interest rate hikes, should be made solely by the BOJ. They added that the BOJ should work with the government to achieve its inflation target of 2% stably. The Takaichi government has pursued expansionary fiscal policies to stimulate the economy and has previously shown caution against rapid rate increases. Conversely, the BOJ has raised the need for rate hikes to curb rising import prices due to yen depreciation, leading to a divergence in policy direction between the government and the BOJ. However, as the yen-dollar exchange rate approaches 160 yen per dollar, there is a growing consensus within the government regarding the BOJs concerns about inflation. Regarding the timing of the next rate hike, the BOJ prefers to assess economic and price trends further before making a decision, but sources indicate that a September hike cannot be ruled out. As of lunchtime on the day of the report, the likelihood of a rate increase at the BOJs monetary policy meeting on September 18 was estimated at 74%. Since Takaichi took office as Prime Minister last October, the BOJ has raised rates twice. If a third hike occurs in September or October, it would mark the fastest rate increases since Japans economic bubble period in 1989, according to Bloomberg. Meanwhile, the yen, which was nearing 164 yen per dollar at the end of last month, fell to the 155 yen range following the U.S.-Japan coordinated intervention, but this effect was short-lived. As of August 13, the yen-dollar exchange rate has risen to around 159.4 yen, once again threatening the 160 yen mark.* This article has been translated by AI. August 13, 2026 17:
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Chinese Stock Market Declines Amid Profit-Taking; CRO Stocks Surge The Chinese stock market, which had risen the previous day, fell on August 13. After starting the morning session with gains, the market reversed course in the afternoon as profit-taking surged. The Shanghai Composite Index closed down 0.50% at 3,926.96, the Shenzhen Component Index fell 0.87% to 14,288.44, and the ChiNext Index dropped 0.45% to 3,586.04.Overnight, the U.S. Consumer Price Index (CPI) for July met market expectations. While the U.S. CPI showed an increase compared to the previous year, it did not deviate significantly from forecasts. This led to a decrease in the likelihood of a Federal Reserve interest rate hike in September. The probability of a rate increase in the U.S. futures market dropped from about 54% to around 40%. As concerns over Fed tightening eased, Asian markets, including Chinas, initially turned upward. However, the afternoon session saw selling orders emerge, resulting in a market decline.Within the Chinese market, profit-taking was concentrated in sectors facing high valuation pressures. As buying momentum weakened in the afternoon, the market continued its downward trend.In a report released on the same day, CITIC Securities stated, The U.S. CPI for July met expectations, and core inflation continues to show a moderate trend, alleviating market concerns about inflation. They predicted that the Federal Reserve would likely keep U.S. interest rates unchanged for the remainder of the year, with potential adjustments in the following year depending on the CPI situation in the fourth quarter.Notably, CRO (Contract Research Organization) stocks surged, with companies like Nanmo Biological and Boji Medical hitting their upper price limits. According to a report from Cailian, Chinese CRO firms possess competitive advantages in cost, response speed, and global delivery capabilities, with ongoing orders from overseas pharmaceutical companies. Additionally, as investments in domestic biotech ventures recover, the CRO industry is expected to thrive.Food and beverage companies also performed well, with Huangshi Group and Yiming Food reaching their upper price limits. Reports of soaring milk tea sales from Chinese beverage franchises Luckin Coffee and Mixue Ice City contributed to this positive trend. On August 7, Luckin Coffee sold 25 million cups of milk tea in a single day, marking a record high. This surge is expected to drive up wholesale milk prices and improve the performance of dairy-related companies.Meanwhile, the Peoples Bank of China set the yuans central parity rate against the dollar at 6.7888 yuan, an increase of 0.0006 yuan from the previous day, reflecting a 0.01% decline in the yuans value.* This article has been translated by AI. August 13, 2026 16:
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KOSPI Rises Over 3% as Foreign Investors Buy 2.1 Trillion Won Amid Strong Semiconductor Stocks The KOSPI and KOSDAQ both closed higher for the fourth consecutive trading day. The KOSPI rose more than 3% as foreign and institutional investors bought shares, particularly in major semiconductor stocks like Samsung Electronics and SK Hynix. The KOSDAQ also ended on a positive note, recovering above the 860 mark.According to the Korea Exchange, the KOSPI closed at 6,813.34, up 234.30 points (3.56%) from the previous trading day. The index opened at 6,773.92, up 194.88 points (2.96%), and expanded its gains throughout the day, reaching as high as 6,895.63 before giving back some of its gains.Individuals sold a net 27.348 billion won worth of stocks, while foreign and institutional investors bought a net 21.060 billion won and 6.815 billion won, respectively.Most of the top market capitalization stocks saw gains. Samsung Electronics rose 4.89%, SK Hynix increased by 5.92%, Samsung Electronics preferred shares were up 0.91%, SK Square climbed 9.08%, Samsung Electro-Mechanics surged 12.58%, Hyundai Motor rose 2.20%, LG Energy Solution increased by 1.95%, Samsung Biologics was up 0.97%, Hanwha Aerospace rose 2.51%, KB Financial gained 1.27%, and Samsung C&T increased by 2.10%.The strength of major semiconductor stocks drove the index higher. The U.S. stock market saw the July Consumer Price Index (CPI) meet market expectations, and AI-related semiconductor stocks performed well. Samsung Electronics and SK Hynix continued their upward trend, with companies involved in semiconductor materials, parts, and equipment, such as Wonik IPS, also benefiting with a 7.62% increase.Samsung Electro-Mechanics surged 12.58% as expectations grew for increased demand for multilayer ceramic capacitors (MLCCs) due to expanded investments in AI data centers, leading to a broader buying trend in related stocks.On the same day, the KOSDAQ closed at 861.37, up 2.46 points (0.29%). The index opened at 863.15, up 4.24 points (0.49%), and briefly rose to 870.96 but gave back some gains in the afternoon, finishing in positive territory.Individuals bought a net 25.71 billion won worth of stocks, while foreign and institutional investors sold a net 13.63 billion won and 11.58 billion won, respectively.Among the top KOSDAQ stocks, Alteogen closed flat, while EcoPro rose 0.88%, EcoPro BM increased by 0.09%, Rainbow Robotics was up 1.43%, Juseong Engineering gained 3.05%, Wonik IPS rose 7.62%, and HLB increased by 2.76%. Conversely, Rino Industrial fell 0.14%, and IOTechniques dropped 1.82%. ABL Bio closed flat.Lim Jeong-eun, a researcher at KB Securities, stated, The U.S. stock markets July CPI meeting market expectations and the strong performance of AI semiconductor stocks have contributed to the ongoing rally of Samsung Electronics and SK Hynix in the domestic market. With large-cap stocks attracting attention, the semiconductor materials and parts sector is also benefiting from positive expectations.He added, Attention should be paid to the U.S. Producer Price Index (PPI) set to be announced tonight. Following the CPI release, the outlook for a rate freeze in September has risen to about 60%, and it is essential to see if the market maintains a favorable interpretation of inflation.Meanwhile, in the Seoul foreign exchange market, the weekly closing exchange rate for the won against the dollar was recorded at 1,419.4 won, up 3.7 won from the previous day.* This article has been translated by AI. August 13, 2026 16:
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Possibility of Back-to-Back Rate Hikes Increases as Bank of Korea Sets Conditions The Bank of Korea has shifted to a tightening stance following a rate hike last month, raising interest in the possibility of back-to-back rate increases. With the second quarter economic growth rate exceeding expectations and domestic recovery continuing, inflation and household debt are also contributing to pressure for further rate hikes.According to financial sources on August 13, the market initially anticipated that the Bank of Korea would pause after raising rates in July and consider another hike around October. However, recent comments from Bank of Korea Vice Governor Yoo Sang-dae, stating that the likelihood of an additional hike is high unless there is a significant shock, have renewed speculation about consecutive increases at this months monetary policy committee meeting.One key variable in the August rate decision will be the revised economic outlook to be announced this month. As the economic performance this year has significantly outpaced initial forecasts, there is a growing possibility of an upward revision to the growth rate. Previously, the Bank of Korea projected a growth rate of 2.6% for this year in May, and there are expectations that this forecast may be raised again.In fact, the countrys gross domestic product (GDP) grew by 0.6% in the second quarter compared to the previous quarter, far exceeding the Bank of Koreas forecast of 0.2%. Strong domestic demand and robust exports, particularly in semiconductors, have continued the growth trend following a 1.8% increase in the first quarter. The growth rate for the first half of the year stands at 3.8%, the highest level recorded in four and a half years since the second half of 2021 (4.5%).As the South Korean economy continues to surprise with its growth in the second quarter, major international investment banks have also raised their growth forecasts for the year. At the end of July, eight major investment banks projected an average real GDP growth rate of 3.2% for South Korea, up 0.2 percentage points from the end of June (3.0%). These banks have revised their growth forecasts upward for four consecutive months since April (2.4%).Domestic consumption trends are also improving. Credit card usage, a key indicator of domestic consumption, increased by about 20% in June compared to the previous month, combining both individual and corporate spending. In July, consumer spending likely improved further due to vacation season expenditures.However, the ongoing increase in household debt is another factor the Bank of Korea is considering. Despite stringent lending restrictions from banks, household loans, particularly mortgage loans, appear to have continued to rise in July. Earlier, Bank of Korea Governor Jin Hyun-sung noted that the high volatility in financial and foreign exchange markets, along with the renewed rise in housing prices in the metropolitan area, poses risks of financial imbalances. Inflationary pressures are also increasing the need for further rate hikes. Vice Governor Yoo recently stated, We need to consider the Bank of Koreas growth outlook and inflation trajectory going forward. The core consumer price index for July was 116.43, reflecting a 2.3% increase compared to the same month last year, marking the highest growth rate since December 2023. If supply-side factors such as international oil prices and exchange rates, along with domestic demand pressures, continue to rise, this could provide justification for additional tightening.Some analysts in the securities industry are also raising the likelihood of a rate hike in August. Jo Yong-gu, a researcher at Shin Young Securities, stated, Given the second quarter GDP and GDI, as well as the July consumer price index, the conditions for back-to-back hikes are in place. While headline and living costs have slowed, the rise in core prices is a material concern that could indicate upward pressure from chip inflation and demand. * This article has been translated by AI. August 13, 2026 15: