Bank of Korea’s hawkish stance and AI-driven semiconductor rally lift KRW and KOSPI, with a 25 bps rate hike likely in July.
The South Korean Won (KRW) strengthened and the KOSPI surged 4.6% overnight, driven by AI-led semiconductor demand and hawkish guidance from the Bank of Korea (BoK). The KOSPI is up 92% year-to-date, leading global equity markets, with Samsung Electronics and SK Hynix as key contributors.
At its last meeting on May 28, the BoK held rates at 2.50% for the eighth consecutive time but signaled a potential hike. Governor Shin Hyun Song emphasized prioritizing price stability, reinforcing expectations for a 25 bps increase to 2.75% at the July 16 meeting.
KRW outperformed most currencies amid the hawkish policy outlook, while equities benefited from strong semiconductor sector performance. The BoK’s stance contrasts with broader global easing trends, supporting the currency’s resilience.