00:02You're listening to AI Prism from Seoul Economic Daily.
00:30Industrial output stalled in July after two months of gains, even as capital investment kept climbing.
00:35At the same time, foreign investors have been steadily pulling money out of Korean equities as U.S. rate hike
00:41expectations rise.
00:43Regional risk is compounding the picture, with a weakening yen, surging Japanese bond yields, and a fresh flare-up between
00:50the U.S. and Iran, all competing for investor attention.
00:53Here's what the numbers show.
00:55Korea's Industrial Production Index held flat at 120.2 in July, following a 2.4 percent rebound in June, as
01:03auto output fell 4.5 percent on strike disruptions and a high base effect.
01:08Retail sales fell 2.4 percent in July, with car sales down 11.1 percent, the sharpest drop since January
01:162024, while facility investment rose 7.5 percent on strong machinery and transport equipment orders.
01:22Foreign investors sold 10.2 trillion won of Korean shares in August, extending outflows to a fourth straight month since
01:30May.
01:31Kospi daily trading value fell to 25.8 trillion won in August, roughly half its June peak of 50.3
01:37trillion won, while investor deposits dropped below 100 trillion won for the first time in months.
01:43Fed Chair
01:44Kevin Warsh's hawkish Jackson Hole remarks pushed September rate hike odds from 35 percent to 59.7 percent, with markets
01:53now awaiting the Fed's September 15th and 16th meeting.
01:56Japan's 10-year government bond yield climbed to 2.950 percent, the highest in roughly 30 years, as the yen
02:03weakened past 160 per dollar.
02:05The Bank of Japan is now seen at an 80 percent probability of raising rates in September, according to market
02:11pricing.
02:12The U.S. struck Iranian targets again after a month-long pause, and Iran retaliated against U.S. bases in
02:18Jordan.
02:19So what does this mean for global investors positioning in Korea?
02:23Earlier, we said foreign investors pulled out of Korean equities for a fourth straight month in August.
02:28Here's what that actually means for you.
02:30With trading volume near a yearly low and deposits shrinking, the market has little cushion left if September's Fed decision
02:37disappoints.
02:38And with Japanese yields at a three-decade high in yen weakness unresolved, currency hedging costs across the region are
02:44likely to stay elevated until both the Fed and the Bank of Japan make their next move.
02:49Three things worth watching next.
02:52First, the Fed's September 15th and 16th meeting, now pricing better than even odds of a hike.
02:57Second, whether the Bank of Japan follows through on a September hike as its own bond yields sit at multi
03:02-decade highs.
03:03Third, whether the U.S. and Iran de-escalate, or whether warnings about a prolonged conflict start showing up in
03:09oil and safe haven flows.
03:11That's today's AI Prism, Global Investors.
03:13This episode was produced with AI assistance based on Seoul Economic Daily reporting and reviewed by a human editor.
03:20AI Prism is a Wanafre award-winning series.
03:23We'll be back tomorrow.
03:25You've been listening to AI Prism from Seoul Economic Daily.
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