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Next Week's Stock Market Outlook: AI Investment and FOMC Results in Focus Next week, the domestic stock market will focus on the sustainability of AI investments by major U.S. tech companies and the results of the Federal Open Market Committee (FOMC). The market experienced a sharp decline due to the emergence of Chinese AI models and geopolitical risks in the Middle East, but sentiment around semiconductor investments partially recovered following Alphabets announcement of increased capital expenditures (CAPEX). However, ongoing military tensions between the U.S. and Iran, along with concerns over high oil prices, are expected to keep volatility high in the near term.According to the Korea Exchange, on July 24, the KOSPI closed at 6,690.02, down 406.87 points (5.73%) from the previous trading day, while the KOSDAQ finished at 748.22, down 42.06 points (5.32%). Over the week from July 20 to 24, the KOSPI and KOSDAQ fell by 1.91% and 5.51%, respectively.Last week, the stock market was pressured by concerns over the semiconductor industry and geopolitical instability. The Chinese AI startup Moonshot AI unveiled its high-efficiency AI model Kimi K3, raising fears of declining demand for GPUs and high-bandwidth memory (HBM). Additionally, renewed military tensions between the U.S. and Iran led to rising international oil prices and market interest rates. This prompted profit-taking in the semiconductor sector, but Alphabets upward revision of its 2026 CAPEX guidance, alongside cloud growth, alleviated some concerns about a slowdown in AI investment.Signs of recovery in supply and demand were also observed. As individual investors continued to liquidate leveraged positions, foreign investors began buying on dips as the KOSPI fell to the 6,400 level, creating a rebound opportunity. Analysts suggest that the recent adjustments are part of a normalization process rather than a reflection of deteriorating semiconductor conditions.Lee Jae-won, a researcher at Yuanta Securities, stated, What collapsed in July was the excessively accumulated leveraged positions rather than semiconductor profits. Considering Alphabets CAPEX expansion and customer demand, there is no confirmed change supporting the peak-out of AI investment and semiconductor highs. He added, While passing the peak of forced selling does not necessarily indicate a trend reversal, prioritizing large-cap semiconductor stocks and expanding positions in oversold sectors could be a suitable strategy if supply and demand improvements spread.Looking ahead, global monetary policy and the performance of major tech companies are expected to be key variables influencing the stock market. Starting on July 29, the U.S. FOMC and SK Hynixs earnings report will be released, followed by the second-quarter GDP figures for the U.S. and Eurozone, as well as earnings from Microsoft, Meta, and Qualcomm on July 30. On July 31, the Bank of Japans monetary policy meeting and earnings reports from Apple and Amazon are also scheduled.Economic indicators are likely to significantly impact investor sentiment. The market anticipates that the FOMC will keep interest rates steady, but attention will be on the Feds messaging regarding future monetary policy direction. The U.S. second-quarter GDP, released on the same day, is expected to confirm robust consumer and investment trends, while South Koreas July exports, set to be announced on August 1, are projected to continue a strong upward trend, particularly in semiconductors. Stronger-than-expected growth and inflation indicators could dampen expectations for interest rate cuts, potentially weighing on the stock market. Conversely, if AI investment expansion and export growth are reaffirmed, investor sentiment in the semiconductor sector could improve significantly.Analysts predict that the market will remain in a range-bound phase as the earnings confirmation process continues. If major tech companies like Meta, Microsoft, Apple, and Amazon can simultaneously demonstrate both the expansion of AI investments and profitability, it could further restore investor sentiment in the semiconductor sector. However, there are also forecasts that prolonged geopolitical risks in the Middle East and rising international oil prices could lead to increased market volatility. July 25, 2026 06:04 -
Global Inflation Concerns Rise as Oil Prices Hit $100 and U.S. Imposes New Tariffs As international oil prices surpassed $100 per barrel, the United States has imposed new tariffs on key trading partners, reigniting global inflation concerns. Rising oil prices are increasing production and transportation costs, while U.S. tariffs could elevate the prices of imported goods. This situation raises the possibility that central banks in major economies may delay interest rate cuts or consider further hikes.Brent Crude Surpasses $100 Amid Middle East Shipping ConcernsOn July 23, Brent crude for September delivery closed at $100.69 per barrel, a 7.04% increase, marking the first time it has exceeded $100 since May 22. West Texas Intermediate (WTI) also rose by 6.17%, finishing at $92.19 per barrel. Both oil benchmarks have seen gains for five consecutive trading days.Concerns over potential disruptions in oil transportation due to military conflicts in the Middle East have driven prices higher. The ongoing U.S.-Iran tensions have significantly reduced shipping traffic through the Strait of Hormuz, while Yemens Iran-aligned Houthi group reported attacks on two Saudi oil tankers in the Red Sea.If both the Strait of Hormuz and the Bab el-Mandeb Strait are blocked, two major oil transport routes from the Middle East would be simultaneously threatened. Goldman Sachs has projected that if disruptions in the Strait of Hormuz persist, Brent crude could exceed $120 per barrel in the fourth quarter of this year. They also noted that if the Bab el-Mandeb Strait and the Suez Canal experience disruptions, prices could rise further.The surge in oil prices has also impacted the global bond market. With rising energy costs potentially driving inflation higher, concerns have grown that central banks may need to maintain elevated interest rates for longer or implement additional hikes, leading to a rise in government bond yields across major economies.The yield on the U.S. 10-year Treasury note rose to 4.703% on July 23 and climbed to 4.7135% during Asian trading on July 24, the highest level in 18 months. Germanys 10-year bond yield reached 3.205%, the highest since 2011, while the U.K.s 10-year yield rose to 5.096%, marking a two-month high.U.S. Imposes New Tariffs on 60 Countries, Including South KoreaAdditionally, the U.S. has introduced a new tariff policy that could further increase inflationary pressures. The Office of the U.S. Trade Representative (USTR) announced on July 24 that it would impose tariffs of 10-12.5% on 60 trading partners, including South Korea, under Section 301 of the Trade Act. These countries account for 99.4% of total U.S. imports.The application of tariffs varies by country. For South Korea, Japan, and Switzerland, the combined tariff rate of the existing most-favored-nation (MFN) tariff and the new tariff will be set at a minimum of 12.5%. If the existing rate is below 12.5%, the additional tariff will be adjusted accordingly; if it is already above 12.5%, no new tariff will be applied.The same method will apply to the European Union and Taiwan, but the combined tariff rate will be set at 10%. In contrast, 17 countries, including the U.K., Canada, India, and Mexico, will see an additional 10% tariff added to existing rates, while the remaining countries will face a 12.5% additional tariff.The new tariffs took effect at 12:01 a.m. Eastern Time on July 24. Notably, crude oil, key petroleum products, natural gas, and some fertilizer materials are excluded from this tariff list.Market analysts believe that high oil prices will increase global energy and transportation costs, while the new tariffs will pressure the prices of imported goods entering the U.S., contributing to inflationary burdens in different ways.The decisions of major central banks regarding interest rates have also become more complicated. The European Central Bank (ECB) held its deposit rate steady at 2.25% on July 23, cautioning that the impact of rising energy prices on inflation has not yet fully materialized. If oil prices continue to rise, there are discussions about the ECB potentially raising rates further.The Federal Reserve and the Bank of England are also expected to keep rates unchanged at their upcoming monetary policy meetings next week. However, if oil prices continue to climb, the possibility of additional rate hikes cannot be ruled out.According to Reuters, financial markets estimate about a one-third chance that the Fed will raise rates next week, with expectations for two rate hikes by January 2024 already priced in.* This article has been translated by AI. July 24, 2026 15:56
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Won breaks from yen as SK hynix dollar flows reshape FX outlook SEOUL, July 24 (AJP) - "Excess volatility is undesirable." That identical message from the U.S. Treasury Department applied to both the South Korean won and Japanese yen in its latest semiannual currency report to Congress, even as it kept both countries on its monitoring list. Treasury said recent depreciation pressures were not in line with South Korea's strong economic fundamentals and reiterated that foreign-exchange intervention should be reserved only for episodes of excessive volatility or disorderly market conditions. Yet the two Asian currencies are now telling markedly different stories. Despite both remaining weaker than their economic fundamentals would suggest, the won has staged a sharp rebound while the yen continues to languish near multi-decade lows, creating one of the widest divergences between the two currencies in years. The U.S. dollar traded around 1,465 won and ¥163.4 on Friday. The won has strengthened more than 5 percent this month, while the yen has slipped about 0.5 percent. For the year, the won is still down roughly 1.9 percent against the dollar, but the yen has fallen more than 4 percent. The key difference lies not in monetary policy but in capital flows. ADR windfall changes the equation The catalyst was SK hynix's record $26.5 billion American depositary receipt offering on Nasdaq, one of the largest overseas equity offerings ever by an Asian company. The won briefly weakened into the 1,470 range in offshore non-deliverable forward trading after Houthi attacks on Saudi vessels renewed concerns over Middle East shipping risks. The move proved short-lived as expectations resurfaced that a sizeable portion of SK hynix's dollar proceeds would eventually be converted into won. The company plans to use part of the funds to finance domestic projects, including its Yongin semiconductor cluster and advanced chip-packaging facility in Cheongju. Construction costs, wages and local procurement will ultimately require won funding, creating what analysts see as a sizeable new source of dollar supply. "The actual dollar-supply effect could continue through August or September," said Kwon Ah-min, an FX analyst at NH Investment & Securities. Kwon expects conversions to begin gradually rather than all at once, as SK hynix will retain part of the proceeds in dollars to pay overseas equipment suppliers such as ASML. That suggests the ADR proceeds are more likely to cap rebounds in the dollar-won exchange rate than trigger a one-way appreciation of the Korean currency. Stronger domestic backdrop The capital-flow effect has coincided with improving domestic fundamentals. The Bank of Korea resumed monetary tightening this month, raising its benchmark interest rate for the first time since January 2023. South Korea's economy has also continued to outperform expectations, while foreign investors have returned aggressively to local equities. Overseas investors purchased a net 2.136 trillion won ($1.46 billion) of Kospi shares on July 23 alone, adding another source of dollar inflows. Park Sang-hyun, an economist at iM Securities, said the combination of stronger economic data, higher interest rates and sustained foreign equity purchases could give the won a firmer foundation than in recent months. "There is now considerably greater scope for the exchange rate to decline on a sustained basis," Park said. If expectations for further won appreciation become entrenched, exporters and shipbuilders could accelerate dollar sales and forward hedging, reinforcing downward pressure on the dollar-won rate. Breaking away from the yen The stronger won has produced an increasingly unusual divergence from the Japanese yen, which has historically moved closely alongside Korea's currency because both economies share export-driven industrial structures. The won-yen cross fell below 900 won per ¥100 on July 23 for the first time in roughly 20 months as the Korean currency appreciated while the yen remained trapped near ¥163 per dollar. Park expects the decoupling to continue in the near term because the won is benefiting from a uniquely Korean factor — SK hynix's impending dollar conversions. Over the longer run, however, he believes the traditional correlation between the two currencies is likely to re-emerge once the temporary supply effect fades. That would again make the yen's direction an important determinant of the won. Not everyone is convinced Some economists caution that markets may be overestimating the immediate impact of the ADR proceeds. "Companies are strategic actors as well," said Baek Seok-hyun, an economist at Shinhan Bank's S&T Center. He argued that SK hynix has little incentive to convert large amounts of dollars before the funds are actually needed because its domestic investment programme will unfold over several years. If conversions are spread across a longer period, additional dollar supply could be largely absorbed by import demand and continued overseas investment by Korean households. Another offsetting factor could emerge if foreign shareholders reduce their holdings of Seoul-listed SK hynix shares, convert the proceeds into dollars and shift their exposure into the newly listed U.S. ADRs. Bank of Korea officials said they are closely monitoring how the ADR proceeds could affect foreign-exchange supply and demand. For now, the inflows appear sufficient to restrain any renewed rise in the dollar-won rate through the third quarter. Beyond September, however, the won's trajectory is likely to depend less on one-off corporate flows and more on broader market drivers — the Bank of Korea's policy path, foreign demand for Korean equities, corporate dollar selling, outbound investment by Korean residents and, perhaps most importantly, whether the long-standing relationship between the won and the yen ultimately reasserts itself. July 24, 2026 15:40 -
Editorial: Super-weak yen is Korea's problem too The yen has just done something it hasn't done in 40 years: it broke past 163 to the dollar, a level not seen since 1986. In Tokyo, that's being read as bad news for Japanese households, who now face pricier imports and a shrinking real income. But Seoul shouldn't be watching this from the sidelines. A weaker yen doesn't just weaken Japan's currency — it chips away at Korean export competitiveness and drags the won down with it. The won has been softening against the dollar too, but the yen is falling faster. That's the awkward part. Even as the won loses value, Korean goods are somehow becoming less price-competitive relative to Japanese ones. Korean firms are stuck importing oil, gas and raw materials in expensive dollars, while fighting for market share abroad against Japanese rivals who get a built-in discount from their own currency's collapse. It's a cost squeeze and a competitiveness squeeze at the same time. This isn't confined to a couple of legacy industries. Korea and Japan go head-to-head across autos, steel, machinery and petrochemicals, but also in semiconductor equipment, batteries, robotics and defense manufacturing — precisely the sectors both countries are betting their industrial futures on. A prolonged weak yen lets Japanese firms either cut export prices or plow their currency-driven windfall into R&D and capital investment. Korean firms, facing the same global buyers, are left choosing between defending market share by cutting margins or protecting margins by ceding orders. Smaller exporters, with the least room to absorb either option, take the hardest hit. Some argue Korean firms have closed the technology gap enough that yen weakness doesn't sting the way it once did. That may be true in segments where design and quality dominate. But in auto parts, machinery and materials — industries won on price as much as performance — an exchange-rate gap translates directly into lost orders. If a Japanese supplier can offer a comparable part for less, the incentive for a buyer to choose Korea shrinks accordingly. There's a second-order effect, too. Won and yen tend to move together as "Asian currencies" in the eyes of global investors. When the yen keeps sliding, foreign capital is more inclined to treat the won as part of the same weak-currency basket and sell accordingly — a dynamic that only intensifies if global financial markets turn volatile. A weaker won might sound like a small silver lining for exporters, but the costs outweigh the benefit. Import prices for oil, gas and grain rise, corporate foreign-currency funding gets more expensive, and a fragile consumption recovery gets harder still as living costs climb. This also complicates the Bank of Korea's job considerably. Domestic conditions argue for lower rates, but a weakening won and rising import prices argue against moving too quickly. Hold rates too high for too long to defend the currency, and households, the self-employed and small businesses absorb the interest burden instead. Super yen weakness is narrowing Korea's monetary policy options from both directions at once. The government's response can't stop at currency intervention. Smoothing out disorderly swings in the foreign exchange market is a stopgap, not a fix — it does nothing to close the underlying competitiveness gap. What's needed is a sector-by-sector look at where the yen shock is hitting hardest, along with expanded exchange-rate insurance and policy financing, particularly for smaller exporters heavily exposed to raw material imports. More fundamentally, Korean industry needs to build a structure that isn't so easily rattled by currency swings in the first place. While Japanese companies redirect their yen-driven profits into technology and capacity, Korean firms shouldn't be left boxed in by high interest rates, regulation and a sluggish domestic market. Without gains in core technology and productivity, the competitiveness gap will outlast the currency cycle that exposed it. A won that's weak, paired with a yen that's weaker still, is about the worst combination Korea could face right now — rising import costs, falling export competitiveness, and a monetary policy squeezed by currency instability on both sides. Super yen weakness shouldn't be filed away as a Japanese problem. It's a compound risk to the Korean economy, and it calls for action now, not after the fact. July 24, 2026 13:25 -
Second Quarter GDP Shows Unexpected Growth, Signaling Potential Rate Hike South Koreas economy continued its unexpected growth in the second quarter, increasing the likelihood of an additional interest rate hike by the Bank of Korea. If the consumer price index for July, set to be released next month, remains high, expectations for a consecutive rate increase in August will strengthen.According to the Bank of Korea on July 23, the real gross domestic product (GDP) grew by 0.6% in the second quarter compared to the previous quarter. This figure significantly exceeds the central banks forecast of 0.2% made in May. After recording a growth rate of -0.1% in the fourth quarter of last year, the economy rebounded with a growth of 1.8% in the first quarter and maintained a solid trajectory in the second quarter.The quality of growth has also improved. The real gross domestic income (GDI) rose by 3.6% from the previous quarter and by 15.6% year-on-year. The gap between the GDP growth rate and the GDI growth rate widened to 11.9 percentage points, the largest since the Bank began tracking these statistics in 1960.Lee Dong-won, head of the Bank of Koreas Economic Statistics Division, stated, The increase in real purchasing power due to changes in relative prices of exports and imports was greater than the increase in production. The improvement in real GDI can lead to increased corporate investment and household purchasing power, which may positively impact domestic demand in the future.As a result, the possibility of the annual growth rate exceeding 3% has increased. Market analysts are also revising their growth forecasts upward. Ha Geon-hyung, an economist at Shinhan Investment Corp., noted, Reflecting the strong semiconductor market in the first half and the potential for domestic demand expansion in the second half, we are raising our growth forecast for this year from 3.1% to 3.3%.The stronger-than-expected growth is also raising the possibility of further interest rate hikes by the Bank of Korea. With the growth rate significantly exceeding expectations and the expansion of real GDI confirming the potential for improved corporate investment and household purchasing power, the justification for maintaining a tightening stance has been strengthened.Earlier, Bank of Korea Governor Lee Ju-yeol indicated on July 16, after raising the benchmark interest rate to 2.75%, that he would assess the possibility of an August consecutive hike based on the second quarter GDP and GDI figures and the July consumer price inflation rate. There are expectations in the market that the previously anticipated timing for an additional rate hike in October could be moved up to August.Kim Jin-wook, an economist at Citibank Korea, remarked, Considering the stronger-than-expected GDP and GDI, there is a high likelihood of a 0.25 percentage point increase in the benchmark interest rate at the August Monetary Policy Committee meeting. Both growth and inflation are moving in a direction that supports the Bank of Koreas tightening stance.Market attention is now focused on the July consumer price index. While there are forecasts that inflation may slow, the ongoing rise in energy prices due to instability in the Middle East could prolong inflationary pressures longer than expected. The consumer price inflation rates were recorded at 3.1% in May and 3.2% in June, marking two consecutive months above 3%. If the July consumer price inflation rate exceeds market expectations, the likelihood of the Bank of Korea implementing consecutive interest rate hikes will increase further.* This article has been translated by AI. July 23, 2026 18:32
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Super Yen Weakness Poses Dual Challenges for South Korean Economy The exchange rate of the yen against the dollar has surpassed 163 yen, reaching its highest level in 40 years since 1986. This rise in the exchange rate indicates a significant drop in the value of the yen, commonly referred to as a super yen weakness. While this situation exacerbates import prices and household burdens in Japan, it also poses challenges for the South Korean economy. The depreciation of the yen diminishes the export competitiveness of South Korean companies and adds downward pressure on the value of the won.Recently, the won has also weakened against the dollar, but the yen is declining at a faster rate. Despite the lower value of the won, South Korean products are becoming less price-competitive compared to Japanese products. As South Korea imports crude oil, gas, and raw materials at high dollar prices, it must compete with Japanese companies benefiting from the yens depreciation. This situation results in simultaneous cost burdens and weakened export competitiveness.South Korea and Japan compete in various sectors, including automobiles, steel, machinery, petrochemicals, as well as advanced manufacturing industries such as semiconductor equipment, batteries, robotics, and defense. If the yens weakness persists, Japanese companies may lower their overseas selling prices or reinvest the increased profits from the exchange rate effects into research and development and facility investments. In contrast, South Korean companies may have to lower prices to maintain market share, sacrificing profitability in the process. Smaller export firms are likely to feel the impact more acutely.Some argue that the quality and technology of South Korean companies have improved, reducing the impact of yen depreciation compared to the past. However, in industries where price competition is crucial, such as automotive parts, machinery, and materials, exchange rate differences directly affect order competitiveness. If Japanese companies offer similar products at lower prices, the incentive for clients to choose South Korean firms diminishes.The yens weakness also exerts downward pressure on the won. In international financial markets, the won and yen often move together as Asian currencies. If the yen continues to decline, foreign investors may increasingly sell the won, viewing it as a weak currency. In times of global financial market instability, the wons depreciation could worsen.While a further decline in the won could provide some benefits for exports, the losses may outweigh the gains. Rising import prices for crude oil, gas, and grains, along with increased costs for companies to procure foreign currency, could exacerbate the burden on living costs, making it even more challenging to recover from already sluggish consumer spending.The Bank of Koreas monetary policy becomes more complicated. While there may be a need to lower interest rates based on economic conditions and domestic demand, the depreciation of the won and rising import prices make it difficult to act hastily. Conversely, maintaining high interest rates for an extended period to defend the exchange rate increases the interest burden on households, self-employed individuals, and small businesses. The super yen weakness is narrowing South Koreas monetary policy options.The government should not solely focus on defending the exchange rate. Interventions in the foreign exchange market are merely temporary measures to prevent rapid fluctuations and do not address the underlying gaps in industrial competitiveness. It is essential to assess sectors heavily impacted by yen depreciation and expand foreign exchange fluctuation insurance and policy financing. Support for small and medium-sized enterprises with high import ratios of raw materials is also necessary.More importantly, companies must create structures that are less susceptible to exchange rate fluctuations. While Japanese companies invest the profits gained from yen depreciation into technology development and investment, South Korean firms should not be hindered by high interest rates, regulations, and sluggish domestic demand. If South Korean companies fail to enhance core technologies and productivity, the competitiveness gap will persist even after exchange rates normalize.The current exchange rate structure, where the won is weak but the yen is even weaker, presents the most challenging combination for South Korea. Import prices are rising while export competitiveness is declining, and exchange rate instability is constraining monetary policy. The super yen weakness should not be viewed as solely a Japanese issue; it must be recognized as a complex risk factor for the South Korean economy that requires proactive responses.* This article has been translated by AI. July 23, 2026 15:08
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Bank of Korea Revamps Financial Support Loans for SMEs The Bank of Korea is set to revise its financial support loan system to allow for flexible adjustments in loan limits and interest rates for small and medium enterprises (SMEs), while also enhancing support for regional SMEs.On July 23, the Banks Monetary Policy Committee approved the proposed changes to the financial support loan regulations.The financial support loan system is a policy tool that enables the Bank of Korea to provide low-interest funds to financial institutions, aimed at assisting SMEs that face relatively challenging funding conditions.Currently, the total loan limit provided to banks is predetermined, with allocations made based on specific criteria. However, concerns have been raised about the rigidity of support levels, which have remained fixed for an extended period, making it difficult to respond flexibly to changing economic conditions.There are also worries that the system has not adequately reflected changes in policy conditions, such as the expansion of the economy, leading to diminished effectiveness.In response, the Bank of Korea has decided to enhance the functionality of the financial support loan system as a monetary policy tool.Starting in the second half of next year, the Bank will introduce a new SME Credit Linkage Support program that will allow for flexible adjustments in loan limits and interest rates based on economic conditions, targeting all SMEs rather than specific sectors.Loan allocations will be based on the quarterly net increase in SME loans from banks, rather than on pre-established criteria.To expand support for SMEs located in regional areas, the limit for the Regional SME Support program will also be increased starting in the first half of next year. Despite the growth of regional economies, the limit has remained fixed at 5.9 trillion won since 2014.The distribution of the increased limit for the regional SME support program will be determined by comprehensively considering changes in financial and economic conditions.Additionally, the Bank plans to gradually reduce and phase out the Trade Finance Support and New Growth and Job Support programs, which have been operated with a quasi-fiscal nature for an extended period.* This article has been translated by AI. July 23, 2026 11:44
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Google's Strong Performance Eases AI Investment Concerns, Driving Down Won-Dollar Exchange Rate The exchange rate between the South Korean won and the U.S. dollar is declining as concerns over artificial intelligence (AI) investments ease following Googles strong performance.As of 9:45 a.m. in the Seoul foreign exchange market, the won is trading at 1,473.2 won per dollar.The exchange rate opened at 1,477.5 won, down 2.6 won from the previous days closing price, and has continued to decline.Google reported results that exceeded market expectations and raised its annual capital expenditure (CAPEX) forecast, alleviating concerns about reduced AI investments. The uncertainty surrounding the profitability and scale of AI investments, which had recently been cited as a reason for the weakness in semiconductor stocks, has improved, boosting global risk appetite.As a result, foreign net buying is expected to flow into the domestic stock market, particularly in Samsung Electronics and SK Hynix. The increase in offshore custody dollar sales during the foreign stock buying process is likely to exert downward pressure on the won-dollar exchange rate.However, geopolitical tensions in the Middle East are supporting the lower end of the exchange rate. On July 22, U.S. forces conducted additional airstrikes against Iran. Both sides have warned of potential attacks on civilian infrastructure, raising tensions once again.Min Kyung-won, an economist at Woori Bank, stated, The recovery of risk appetite due to Googles strong performance, along with the custody volume from foreign net buying and the chasing sales from exporters, will support the strength of the won. If the European Central Bank (ECB) monetary policy meeting tonight is interpreted as hawkish, it could lead to euro strength and dollar weakness, adding further downward pressure on the exchange rate.* This article has been translated by AI. July 23, 2026 10:00
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U.S. Stocks Decline Amid Rising Oil Prices and Tech Earnings Concerns The three major U.S. stock indices fell on July 22 as rising international oil prices heightened inflation concerns and investors grew wary ahead of earnings reports from major tech companies like Alphabet and Tesla.The Dow Jones Industrial Average closed down 6.06 points, or 0.01%, at 52,218.58. The S&P 500 dropped 10.24 points, or 0.14%, to finish at 7,498.96, while the tech-heavy Nasdaq Composite fell 146.30 points, or 0.57%, ending at 25,690.90.The surge in oil prices dampened investor sentiment. Brent crude rose by $3.06 to $94.07 per barrel, and West Texas Intermediate (WTI) climbed to $86.83, both reaching their highest levels in about six weeks.Concerns about supply disruptions increased as armed conflict continued between the U.S. and Iran, with Yemens Iran-aligned Houthi group threatening maritime blockades on Saudi oil shipments. The uncertainty surrounding key oil transport routes in the Strait of Hormuz and the Red Sea contributed to the rise in oil prices.There are growing fears that rising oil prices could lead to renewed inflation. The yield on the 10-year U.S. Treasury note rose to around 4.63%, adding pressure to the stock market. There is also apprehension that continued increases in energy prices could delay the Federal Reserves monetary policy easing.Tech stocks generally showed weakness ahead of the second-quarter earnings reports from Alphabet and Tesla. Alphabet fell 1.5%, while Tesla dropped 1.3%. As significant investments in artificial intelligence (AI) continue, investors are increasingly focused on whether these expansions will translate into actual revenue and profit growth.In contrast, semiconductor stocks performed relatively well. The Philadelphia Semiconductor Index rose 0.4%, marking its third consecutive day of gains. Supermicro Computer surged 19.8% on news of large new orders, while Dell Technologies and Hewlett Packard Enterprise (HPE) increased by 9.3% and 3%, respectively.Stock prices also fluctuated based on corporate earnings. AT&T rose 3.5% after reporting a higher-than-expected increase in wireless subscribers for the second quarter. Philip Morris International also saw a 3.3% increase, buoyed by better-than-expected earnings.After the market closed, Alphabet and Tesla released their second-quarter earnings. Alphabet exceeded market expectations, driven by strong demand for AI, and announced plans for significant investment expansion. Teslas revenue also surpassed market forecasts, but the company reported a $1.1 billion deficit in free cash flow for the second quarter.* This article has been translated by AI. July 23, 2026 07:16
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Yen Falls Past 163 Against Dollar for First Time in 40 Years The yen has fallen past 163 against the dollar for the first time since December 1986, reaching its lowest value in 40 years. The decline is attributed to increased demand for the dollar as a safe asset amid escalating tensions in the Middle East, coupled with rising international oil prices that heighten the likelihood of U.S. interest rate hikes. Analysts suggest that Japans proactive fiscal measures and the Bank of Japans (BOJ) slow rate increases, along with a perception that monetary authorities may not act decisively, have further exacerbated the yens weakness.On July 21, the yens exchange rate briefly reached 163.24 per dollar, marking the highest level in nearly 39 years and 7 months. After fluctuating between the low 161 yen and mid-162 yen range for the past two weeks, the yen surged past the previous high of 162.84 yen recorded on July 1, driven by a wave of stop-loss selling. The yens decline continued in the Tokyo market on July 22, where it reached 163.21 yen per dollar at one point.The immediate catalyst for this decline was the worsening situation in the Middle East. The Asahi Shimbun reported that fears of escalating conflict between the U.S. and Iran have accelerated dollar buying. The Yomiuri Shimbun noted that the Iran-aligned Houthi rebels in Yemen declared a maritime blockade against Saudi Arabian vessels, contributing to rising oil prices and yen selling.West Texas Intermediate (WTI) crude oil prices rose to around $85 per barrel. Concerns about renewed inflationary pressures in the U.S. due to rising oil prices have strengthened expectations for interest rate hikes by the Federal Reserve, with the yield on U.S. 10-year Treasury bonds climbing to approximately 4.6%. The probability of a Fed rate hike in July, as reflected in the U.S. short-term interest rate futures market, increased from 16% to 26.2%. Rinto Maruyama, a senior interest rate and currency strategist at SMBC Nikko Securities, analyzed that the expectations for U.S. rate hikes and the widening interest rate gap between the U.S. and Japan have led to continued yen selling and dollar buying.The rise in oil prices has also increased Japans energy import costs, further contributing to the yens decline. Atsuhide Sakamoto, a senior economist at Mitsubishi UFJ Morgan Stanley Securities in New York, explained that the increase in energy import costs could widen the trade deficit, raising long-term pressures on the yen.Perception of Yen Weakness Acceptance SpreadsHowever, the current yen depreciation cannot be solely explained by the dollars strength amid Middle East instability. The dollar index, which measures the dollars value against major currencies, rose by 0.2 points to around 101, yet the yen hit its lowest level in 39 years and 7 months. The yen-euro exchange rate also climbed to the low 186 yen range per euro, marking the lowest value for the yen in about a month. During the past two weeks of renewed U.S.-Iran conflict, the yen has depreciated by 0.6% against the dollar, making it the weakest among the ten major currencies (G10) with high trading volumes. In contrast, currencies like the New Zealand dollar, which continue to raise interest rates, have seen buying interest even in a strong dollar environment. While Middle East tensions may have triggered the yens decline, internal factors in Japan have amplified the drop.In fact, the yen-dollar exchange rate was around 147 yen per dollar when Sanae Takaichis administration took office in October last year, but concerns over proactive fiscal measures have led to a rise of more than 16 yen in just nine months. The Nihon Keizai Shimbun (Nikkei) reported that after the Japanese government confirmed its Basic Policy on Economic and Fiscal Management and Reform (Honebuto Policy) at a Cabinet meeting on July 21, the perception that the government is effectively accepting yen weakness has spread in the market.This policy changed the wording from fiscal consolidation to fiscal sustainability, which was included in previous years. Although the government added a clause respecting the independence of the BOJ that was not in the original draft, the market did not view it as a factor that would reverse the yens decline. Kosuke Hanao, head of Valta Research, pointed out, The governments economic policy is ultimately leading to a direction that accepts yen weakness, and the market believes that monetary authorities will not be able to act decisively.Concerns that the BOJ may delay interest rate hikes and fiscal instability due to tax cuts have also been identified as factors contributing to the yens weakness. Maruyama noted that fears of the BOJ lagging behind in responding to inflationary pressures from rising oil prices are fueling the yens decline. He indicated that considering the declining approval ratings of the Takaichi Cabinet, there is a high likelihood that a tax cut proposal to lower the consumption tax rate on food to 1% will be pursued, but discussions on securing funding have been postponed under the Honebuto Policy, raising concerns about fiscal deterioration.Market Intervention Possibility RisesAs the yen falls to its lowest level in 39 years and 7 months, concerns about market intervention have increased. Finance Minister Satsuki Katayama stated on July 22, We will respond appropriately and decisively whenever necessary, hinting at the possibility of market intervention. However, she refrained from commenting on specific exchange rate levels, stating, The governments policy has not changed. Despite Katayamas remarks, the foreign exchange market showed little reaction. The Nikkei reported that a cynical view is spreading in the market that mere intervention will not address the fundamental causes of the yens weakness.In reality, the Japanese government lacks a strong justification for immediate market intervention. While the exchange rate has risen, the pace of the yens decline has been relatively moderate. The expected volatility of the yen over the next month is in the low 6% range, lower than the 8% range seen on July 1 when the exchange rate surged. The Nikkei pointed out that with the current movements, it is difficult for the Japanese government to argue that there is excessive volatility, which has been its justification for foreign exchange market intervention.Akihiro Kawakami, an analyst at Mitsubishi UFJ Bank, predicted on July 22 that the yen could fall to around 163.50 per dollar in the Tokyo market. The market is now discussing 165 yen as the next critical threshold. The Nikkei warned that if the Japanese government continues its passive stance, corporate dollar buying and the yen carry trade—borrowing yen at low interest rates to invest in high-yield assets—could further drive the yens value down to around 165 yen per dollar. Mari Iwashita, chief interest rate strategist at Nomura Securities, suggested that if the yens value drops to 165 yen before the BOJs monetary policy meeting in September, the government may intervene to buy time.* This article has been translated by AI. July 22, 2026 13:48
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Interest Rate Hikes Raise Concerns for Vulnerable Borrowers 한국은행이 기준금리 인상 기조로 전환한 데 이어 하반기 추가 금리 인상 가능성까지 높아지면서 저소득·저신용 차주를 중심으로 이자 부담이 확대될 것이라는 우려가 커지고 있다. 코로나19 이후 취약 부문의 부실이 충분히 해소되지 않은 상황에서 대출금리 상승이 이어지면 상환 부담이 한층 커질 수 있다는 분석이다.According to the Bank of Korea, the delinquency rate for household loans rose to 1.00% in the first quarter of this year, up from 0.92% in the fourth quarter of last year. While the overall delinquency rate remains within long-term averages, the central bank has noted signs of deteriorating financial health among vulnerable borrowers.The proportion of vulnerable borrowers, defined as low-income and low-credit households and self-employed individuals, increased from 6.4% at the end of the third quarter of last year to 6.7% at the end of the first quarter of this year. These borrowers, who typically have low income and credit scores and often hold debts from multiple financial institutions, are expected to be most affected by rising interest rates.Market analysts believe there is a high likelihood that the Bank of Korea will raise the benchmark interest rate at least once more this year. As the benchmark rate increases, it will eventually be reflected in loan rates, further increasing the repayment burden for vulnerable borrowers.In fact, rising interest rates directly lead to increased interest burdens for borrowers. According to data submitted by the Bank of Korea to lawmaker Lee Jong-wook of the People Power Party, a 0.25 percentage point increase in mortgage rates is estimated to raise the annual interest burden for all borrowers by approximately 1.8 trillion won. This translates to an additional burden of about 296,000 won per borrower annually. If further rate hikes occur, the interest burden could increase even more.The burden on vulnerable groups is already evident in statistics. According to the National Data Agencys household trend survey, the average monthly interest cost for all households in the first quarter of this year was 136,515 won, a 6.6% increase from the same period last year. In contrast, the interest costs for the lowest income 20% of households rose by 23.9% during the same period, more than three times the overall average increase. This indicates that the impact of rising interest rates is disproportionately affecting low-income households.Experts warn that if the tightening of monetary policy continues for an extended period, the repayment capacity of vulnerable borrowers could deteriorate rapidly. If income growth does not keep pace with rising interest burdens, delinquencies may increase, which could also pose risks to the financial sectors stability.Kim Sang-bong, a professor of economics at Hansung University, stated, Market interest rates are already at a high level. If the benchmark rate is raised two more times, the repayment burden for vulnerable borrowers could increase sharply.* This article has been translated by AI. July 21, 2026 18:48
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Japan Confirms 'Honebuto Policy' with 336.2 Trillion Yen Investment by 2040 Japans government finalized its Honebuto Policy during a cabinet meeting on July 21, outlining key policies and budgetary directions for the upcoming year. This marks the first Honebuto Policy established since the administration of Prime Minister Sanae Takaichi took office. The plan includes over 370 trillion yen (approximately $3.36 trillion) in public and private investments in strategic sectors such as artificial intelligence (AI) and semiconductors by the fiscal year 2040, while also retracting the goal of achieving a primary budget surplus in a single year.The Takaichi administration aims to formalize responsible active fiscal policy as the guiding principle for economic and fiscal management, with a target of achieving real economic growth exceeding 1% and nominal growth surpassing 3%. However, amid rising long-term interest rates and controversy over the governments influence on the Bank of Japans rate hikes, language regarding the independence of the Bank of Japan was added at the last minute.According to reports from Yomiuri Shimbun and others, the Japanese government plans to invest over 370 trillion yen in 62 products and technologies across 17 strategic sectors, including AI, semiconductors, quantum technology, and next-generation energy, by the fiscal year 2040. To support this, a new Strong and Prosperous Japan investment budget will be established, allowing for concentrated budget allocations over multiple years in growth sectors. The government aims to increase private capital investment to 250 trillion yen annually by 2040 and expand nominal GDP to nearly 1,100 trillion yen.This separate budget will not impose a cap on budget requests, marking a shift from the previous approach of uniformly restraining overall expenditures. The government has designated the fiscal year 2027 as the first year of responsible active fiscal policy and is preparing a long-term economic and fiscal plan looking ahead to 2040. Ongoing projects will be reflected in the initial budget, while supplementary budgets will be limited to urgent matters such as disasters and economic crises.The goals for fiscal management have also undergone significant changes. The primary balance (PB), a key indicator of fiscal consolidation for national and local governments, will no longer aim for a single-year surplus but will be managed over multiple years. Temporary deterioration of the PB due to economic fluctuations or investment needs will be permitted.Debt Ratio Stability GoalInstead, the government has set a core objective of steadily reducing the national debt-to-GDP ratio. The plan is to grow the economy through government investment, thereby increasing GDP and lowering the debt ratio. The term fiscal consolidation, used since the first Honebuto Policy in 2001, has been replaced with ensuring fiscal sustainability.Takaichi stated, We will break the trend of excessive austerity and lack of future investment and significantly expand domestic investment. While the government maintains that it is not weakening fiscal discipline, concerns have arisen that active fiscal policy could lead to increased government bond issuance, especially given that Japans debt-to-GDP ratio is the highest among the G7 nations. The government has pledged to ensure that the scale of bond issuance does not undermine market confidence and to transparently explain its fiscal management policies.Language related to the Bank of Japans monetary policy was also modified from the original draft. The draft released at the end of June included a statement emphasizing the importance of appropriate monetary policy management to achieve a strong economy. This led to interpretations in the market that the Takaichi administration was attempting to control the Bank of Japans interest rate hikes. The removal of the term fiscal consolidation resulted in a sell-off of government bonds, rising long-term interest rates, and a decline in the value of the yen, a phenomenon referred to as the Honebuto Shock. The yield on Japans 10-year government bonds surged to 2.9% on July 9, the highest level in nearly 30 years since 1996. Long-term interest rates, which were around 1.6% when the Takaichi administration took office last October, are now fluctuating around 2.7%.To calm market anxieties, the final policy document includes a footnote citing Article 3 of the Bank of Japan Law, stating, The specific means of monetary policy are entrusted to the Bank of Japan. Minister of Economic and Fiscal Policy, Minoru Kawai, explained at a press conference on July 21 that this footnote was one of the revisions reflecting the opinions and concerns of the ruling party. Asahi Shimbun noted that it is unusual for the government to emphasize the independence of the Bank of Japan, a self-evident principle.However, despite the addition of language regarding independence, the Takaichi administrations commitment to active fiscal policy remains unchanged. Shotaro Kugo, a senior researcher at the International Monetary Fund, told Asahi Shimbun, This Honebuto Shock is evidence that the financial market is concerned about the Takaichi administrations fiscal management. How the markets warnings are reflected in future policies will be crucial.* This article has been translated by AI. July 21, 2026 17:20
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Chip boom puts BOK on tightening path, but spillover debate clouds outlook SEOUL, July 21 (AJP) - South Korea's bond market is increasingly pricing in another interest-rate increase this year after the Bank of Korea's July hike, as Governor Shin Hyun-song argues that the country's chip-driven income boom is beginning to generate demand-side inflation despite a still-sluggish domestic economy. Investors now widely expect the benchmark policy rate to reach 3.0 percent by year-end after the central bank last week raised it by 25 basis points to 2.75 percent, its first increase since January 2023. Some analysts see the next move coming as early as the Aug. 28 policy meeting. "We are seeing an exceptional condition. The gross domestic product has grown 3.8 percent (from a year earlier) in the first quarter whereas the gross domestic income grew much greater at 13.2 percent," Shin said after the July 16 monetary policy meeting. "We have to see if this is a temporary phenomenon or one that could have a big impact on the economy." Shin said the divergence suggested the economy may be entering a new phase in which income growth, fueled by soaring export prices, begins to feed domestic demand. "If income improvement continues at this kind of strength, we may have to be wary of inflationary pressure from the demand side," he said. Markets have already begun positioning for that possibility. The benchmark 10-year Korean government bond yield climbed to an annual high of 4.365 percent by midday Tuesday, up from an average of 4.252 percent in June and 3.612 percent in February before the outbreak of the Iran conflict. Shin has also indicated that the latest rate increase marks the beginning of a broader tightening cycle. Alongside imported inflation stemming from elevated energy prices and a weaker won, he has increasingly pointed to domestic pressures, including faster wage gains linked to the AI boom. The government's recent decision to raise its 2026 economic growth forecast to 3.0 percent — the strongest pace since 2021 — has reinforced that narrative. Semiconductor exports have powered much of the recovery, with outbound shipments reaching $551.3 billion as of July 20, keeping the country on course to touch the $1 trillion mark for the first time. Government officials and the central bank argue that the current semiconductor cycle differs fundamentally from previous booms. Unlike earlier upcycles, they contend, the AI-driven surge is generating unprecedented corporate earnings that are flowing into wages, shareholder income, investment and tax revenues, creating a broader economic impact. The BOK maintains that stronger semiconductor earnings will gradually spread through investment, household income and consumption while lifting corporate and earned-income tax receipts. Shin has rejected the view that the benefits will remain confined to a handful of chipmakers, although he acknowledged much of the fiscal windfall will become visible next year. The central bank strengthened that argument in an Issue Note released Sunday, saying the latest improvement in Korea's terms of trade could have a more durable effect on domestic demand because it stems from structural AI-related semiconductor demand and higher export prices rather than temporary declines in oil prices. According to the report, previous improvements in the terms of trade often reflected cheaper imported energy, which boosted purchasing power but faded as commodity prices recovered. This time, however, higher export prices driven by AI memory chips may sustain income gains for longer, encouraging consumption and business investment. Yet evidence that the semiconductor windfall is spreading across the broader economy remains mixed. Retail sales, construction activity and many service industries have recovered only gradually despite record exports and surging corporate earnings. Corporate data also point to a disconnect between profits and employment. Employment at 282 of Korea's 500 largest companies rose just 0.2 percent over the past three years even as sales increased 10.9 percent and operating profit jumped 81.0 percent, according to corporate tracker Leaders Index. The contrast is even sharper in the semiconductor-heavy IT, electrical and electronics sector. Sales climbed 34.4 percent and operating profit surged 2,740.5 percent, yet employment increased by only 1,727 workers, or 0.6 percent. The BOK itself acknowledges many of those limitations. Its report noted that IT manufacturing accounts for only 2.6 percent of business-sector employment, limiting the direct transmission of semiconductor gains into household income. It also said most wage increases and equity gains accrue to high-income households with relatively low propensities to consume. Investment spillovers may also prove weaker than headline figures suggest. Roughly 60 percent of semiconductor manufacturing equipment is imported, while Korean chipmakers have increasingly expanded production overseas, reducing the domestic impact of capital spending. Persistent weakness in construction, retail, smaller manufacturers and other non-IT industries could further dilute the benefits from the export boom. By contrast, the pressures supporting tighter monetary policy are already visible. The won remains one of Asia's weakest major currencies. Shin has repeatedly argued that the Korea-U.S. interest-rate gap deserves close attention because cheaper won funding can encourage carry trades into dollar assets and increase hedging costs for overseas investments, reinforcing depreciation pressure. Following last week's policy meeting, he said the BOK is closely monitoring offshore non-deliverable forward markets and is preparing additional research on how changes in the interest-rate differential affect currency flows. Even after the July rate increase, Korea's benchmark rate remains 1 percentage point below the upper end of the U.S. Federal Reserve's 3.50-3.75 percent target range. Currency weakness has also offset part of the income gains generated by stronger exports. While Taiwan has benefited from the same AI-driven semiconductor cycle, the Korean won has fallen about 13 percent against the U.S. dollar since the end of 2023, compared with roughly 5 percent for the Taiwan dollar. That depreciation has continued to raise import costs for energy, food and raw materials, with Shin noting that import prices remain around 20 percent higher than a year earlier. Meanwhile, financial stability concerns continue to build. Housing prices have accelerated across Seoul and much of Gyeonggi Province, while household lending has continued expanding by roughly 8 trillion won to 9 trillion won a month despite tighter lending regulations. Those pressures complicate the policy outlook. The immediate beneficiaries of the semiconductor boom remain concentrated among large exporters, shareholders and highly paid technology workers, while higher borrowing costs are felt much more broadly by indebted households, small-business owners, builders and smaller manufacturers. Shin has argued that such distributional issues should be addressed through targeted fiscal and financial policies rather than monetary policy, allowing interest rates to focus primarily on inflation and financial stability. For markets, the debate is no longer whether semiconductors are lifting Korea's national income — they clearly are. The more important question is whether those gains will spread widely enough through wages, consumption and investment to justify a sustained tightening cycle before the broader domestic economy fully recovers. That question is likely to shape not only the Bank of Korea's next rate decision, but also how investors judge the durability of Korea's AI-driven economic resurgence in the months ahead. July 21, 2026 15:13 -
Mortgage Rates Exceed 7.5% as Major Banks Tighten Lending The upper limit for mortgage rates at banks has surpassed 7.5%. With the increase in the base rate and stricter management of household loan volumes, the highest mortgage rates at major commercial banks are rising rapidly. As banks raise their lending thresholds, the financial burden on actual borrowers has intensified.As of July 21, the five major commercial banks—KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup—reported fixed-rate mortgage rates ranging from 4.79% to 7.52%. This marks an increase from the end of May, when rates were between 4.26% and 7.10%, with the lower limit rising by 0.53 percentage points and the upper limit by 0.42 percentage points.The rapid rise in market interest rates is attributed to the Bank of Koreas shift to a tightening monetary policy for the first time in three and a half years. The five-year bank bond rate, a key indicator for fixed-rate mortgages, increased from 4.207% to 4.478%, a rise of 0.271 percentage points during the same period.Variable mortgage rates are also on the rise. The five major banks six-month variable mortgage rates are reported to be between 4.17% and 6.88%, reflecting a three-month consecutive increase in the COFIX rate, a key benchmark for variable loans.The upward trend in loan rates is expected to continue for the foreseeable future. The Bank of Korea may implement up to two additional rate hikes this year, and banks are raising spreads or reducing preferential rates to manage household loan volumes.In this environment of rising rates, banks are also increasing their lending thresholds, creating additional challenges for actual borrowers. KB Kookmin Bank has reduced its mortgage loan limit from 600 million won to 300 million won this month. Shinhan Bank and Hana Bank are also limiting applications through loan brokers. Woori Bank has cut its monthly loan limit for housing-related loans from 3 billion won to 1 billion won per branch.Even SC First Bank, which had been considered a last resort among first-tier banks, has closed its lending window. The bank is currently not accepting new applications for general mortgage loans until the end of October. It has become increasingly difficult to secure new mortgage loans across the banking sector.As of July 15, the outstanding balance of household loans at the five major banks, excluding policy loans, was reported at 649.6612 trillion won, an increase of 4.6912 trillion won from 644.970 trillion won at the end of last year. These banks have already exceeded their annual household loan growth target of approximately 4.34 trillion won, which they submitted to the Financial Supervisory Service at the beginning of the year, by about 350 billion won. This has led to expectations of stringent loan management throughout the second half of the year.According to the Bank of Koreas recently released Financial Institution Loan Behavior Survey Results, the loan attitude index for domestic banks in the third quarter was recorded at -7, down 5 points from -2 in the previous quarter. A lower index indicates stricter loan assessments by banks. It is anticipated that banks will raise the thresholds for mortgage loans, jeonse loans, and credit loans.A financial industry official stated, As interest rates rise and obtaining loans becomes more difficult, there may be an increase in cases where individuals need to revise their plans for purchasing homes or securing funds. Given the possibility of further rate hikes, it is essential to assess repayment capacity based on anticipated interest rate increases. July 21, 2026 15:12
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BOK governor joins Asia-Pacific policymakers amid AI and inflation risks SEOUL, July 21 (AJP) -Bank of Korea Governor Shin Hyun-song will join Asia-Pacific central bankers and financial regulators in Singapore this week for talks on inflation, financial stability and the economic risks posed by intensifying artificial intelligence competition and escalating tensions in the Gulf. Shin will attend the 31st Executives' Meeting of East Asia-Pacific Central Banks (EMEAP) Governors and a separate gathering of central bank governors and financial supervisory chiefs from Wednesday through Friday, the BOK said Tuesday. The discussions come as policymakers assess how the rapid adoption of AI is reshaping economic structures while creating new challenges for financial stability, regulation and monetary policy. Shin and fellow EMEAP governors will exchange views on recent economic developments and examine the implications of AI for regional economies and financial systems. They will also review the work of the group's committees on monetary and financial stability, financial markets, payment and settlement systems, banking supervision, information technology and financial institution resolution. At the separate meeting with financial supervisors, participants will focus on how banks and other financial institutions are deploying AI and the regulatory challenges arising from its broader adoption. Officials will also discuss the macroeconomic and financial implications of supply chain disruptions and possible policy responses. Founded in 1991, EMEAP comprises the central banks and monetary authorities of 11 East Asia-Pacific economies, including South Korea, China, Japan, Australia, Singapore and Hong Kong. Financial regulators from South Korea, China, Japan, Australia and Indonesia will also participate in the joint meeting of central bank governors and supervisory authorities. Shin is scheduled to depart for Singapore on Wednesday and return to South Korea on Saturday. July 21, 2026 13:00