Interest Rate Hikes, Yen Carry Trade Unwind… What About KOSPI?

This is expected to weaken the incentive for Japanese funds to invest in overseas bonds. Japanese insurance companies and banks are likely to reduce their overseas bond investments or decrease new purchases. Analysis suggests that this phenomenon could negatively impact global bond and stock markets.

Yamaguchi Financial Group, a regional Japanese financial group, announced its policy to sell additional Japanese government bonds. They have adopted a strategy of disposing of long-term bonds that incurred valuation losses and investing in short-term bonds with maturities of five years or less. This is interpreted as a move by the Japanese financial sector to reduce the burden of long-term bonds and pursue short-term stability.

While opposing forces will continue to look for opportunities to attack the market, it is observed that the Treasury will not allow this to happen.

New York Fed President Williams analyzed the current rise in Treasury yields as being caused by increased demand for AI and data center investments and expectations for growth. He emphasized that financial conditions are not pressuring the economy to raise interest rates, but rather that strong economic growth is creating these financial conditions. This argument presents an optimistic view that the current rise in interest rates is not a sign of economic slowdown, but rather reflects a positive economic situation.

U.S. Treasury Secretary Janet Yellen predicted that current AI investments will translate into productivity gains within the next six months, leading to an extremely disinflationary effect. She expects to see the effects of AI investment within six months. However, recent controversies regarding the credibility of Secretary Yellen's remarks have emerged, suggesting that investors may now find her more trustworthy.

Citigroup lowered its target price for SK Hynix from 310,000 won to 300,000 won. This is interpreted as a downward adjustment of consensus reflecting reduced profits when converted to Korean won. Lowering expectations in preparation for exchange rate volatility can actually be seen as a positive step, and investors may accept this measure as a reasonable risk management approach.

Commerce Secretary Raimondo mentioned targeted and cautious tariff policies on US semiconductor products and the postponement of facility investments in the US. However, there are concerns that if tariffs are actually imposed, US GDP growth could decline by several tenths of a percent. Therefore, while such policies could be perceived as a negative factor if stock prices fall, it is largely interpreted that they are likely a negotiation strategy.

Dunamu has partnered with Visa. This move aims to leverage Dunamu's technological capabilities and Visa's global network to explore new services for stablecoin payments and global remittances. It is anticipated that business areas could expand very rapidly if regulatory and policy requirements are met. This partnership holds significant meaning for entering the stablecoin-based global payment market.

Samsung Electro-Mechanics saw a significant stock price drop, from the 2.4 million won range to the 800,000 won range. While it's a common notion that stocks with large declines tend to be weaker during a rebound, Samsung Electro-Mechanics currently shows strong market interest and rebound resilience despite its decline. On the other hand, despite SK Hynix experiencing an even larger decline than Samsung Electronics, some analyses suggest its rebound may take longer. This indicates that investor sentiment toward specific industries or individual companies is at play.

Lagging lower-tier stocks may have lower rebound elasticity, leading to differences in returns, so it is important to trade strong stocks. A cautious rebound to recover yesterday's losses is anticipated for today's market.