Brown Brothers Harriman’s Elias Haddad highlights strong South Korean asset performance, with South Korean Won (KRW) outperforming and the KOSPI up sharply on AI-led semiconductor strength. The Bank of Korea’s (BoK) Governor Shin Hyun Song delivered hawkish guidance, emphasizing the need to prioritize price stability. BBH notes that a 25 bps hike to 2.75% at the July 16 meeting is increasingly likely.

Won benefits from hawkish policy stance

"KRW outperformed most currencies overnight and the KOSPI jumped as much as 8.5% before settling 4.6% higher. Year-to-date, the KOSPI is the world’s best performing equity market, up a whopping 92%, driven by the AI-led semiconductor boom. Samsung Electronics and SK Hynix account for a huge share of the index."

"Bank of Korea (BoK) Governor Shin Hyun Song delivered hawkish remarks, consistent with his previous guidance. Shin said “it is necessary to place priority on price stability and raise interest rates before it is too late.” "

"At its last May 28 meeting, BoK kept the policy rate unchanged at 2.50% for an 8th consecutive meeting while Shin stressed that the Board “judged necessary to raise the Base Rate at an appropriate time.” The BoK next meets on July 16 and a 25bps hike to 2.75% is increasingly likely."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)