Super-expensive, non-residential housing comprehensive real estate tax to be raised... Long-term special deduction up to 1 billion won | US-Japan yen joint rescue operation... Double-edged sword | Kwon Soon-woo, 3PRO TV Reporting Team Leader [News3]

Summary

Kwon Soon-woo, reporting team leader, breaks down three major news items. First, Korea's real estate tax reform: super-expensive non-residential homes face higher comprehensive real estate tax and capped capital gains deductions, while cheaper homes get minimal relief and rental supply may tighten. Second, the US and Japan jointly intervened to support the yen, raising fears that a rapid yen strengthening could unwind large carry trades and pressure semiconductors and the Nasdaq. Third, Chery Auto's investment in KG Mobility is analyzed as a strategic move to use Korea as an export hub to bypass tariffs in Europe and the US, against a backdrop of a shifting global auto industry.

• Super-expensive non-residential housing in Korea will face higher taxes and capped capital gains deductions from 2028-2029, while tax cuts for lower-priced homes may be barely noticeable.
• The policy encourages owner-occupancy, which could reduce rental supply and increase rent prices in Seoul.
• US and Japan jointly intervened to support the yen using a 'prema repo' mechanism that avoids selling US Treasuries and thus helps keep US rates stable.
• The intervention is seen as a double-edged sword because a fast yen rise could unwind yen carry trades, currently with short positions double those during the July 2024 turmoil.
• Kwon warns that much of the carry trade money is likely parked in semiconductors and the Nasdaq, so a rapid yen appreciation could trigger selling in those assets.
• Chery Auto is investing in KG Mobility (formerly Ssangyong) via convertible bonds, aiming to use KG's Korean factories as a conduit to export to Europe and the US while avoiding tariff barriers.
• Global auto industry dynamics are shifting: German automakers' combined market cap has shrunk to roughly match Hyundai Motor Group, while Chinese automakers aggressively pursue overseas expansion.