The January BoK MPC minutes reveal a shift towards a more hawkish stance, indicating increased market sensitivity to potential tightening. Despite mixed signals, including a lower USD/KRW and rising property prices, the current data does not decisively sway the Committee's views. Kiyong Seong from Societe Generale provides insights into the evolving dynamics.

BoK shifts towards hawkish stance

"January BoK MPC minutes indicate that the Committee has shifted in a more hawkish direction, helping explain the market’s heightened sensitivity to the risk of additional tightening. The key question now is whether forthcoming developments will be sufficient to sway the currently dovish or neutral members toward a more restrictive stance."

"At present, the signals are mixed: USD/KRW has moved lower, although the currency remains unstable, while property prices continue to rise. As such, the current data flow does not appear decisive enough to materially alter the existing distribution of views within the Committee."

"Two market variables stand out as potential catalysts: a recovering KRW — remembering that around the 15 January MPC date, USD/KRW..."

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