Yen's movement that dropped KOSPI by 15% in the past... Are there still variables that will shake the Korean stock market?

Summary

Song Jae-kyung, CEO of Dimension Investment Advisory, discusses macro risks for Korean equities, focusing on the US 10-year Treasury yield approaching a 5% red line and the potential for a Yen carry trade unwind. He warns that rising long-end yields and bear steepening could lead to equity market pressure. He advises avoiding KOSPI rallies in H2 and the over-owned semiconductor sector, while monitoring the Yen for further strength. He recommends a balanced portfolio amid seasonal weakness and midterm election uncertainty.

• US 10Y yield near 5% could invert stock-bond correlation, signaling downside risk for equities.
• Japanese Yen short positioning and coordinated intervention may trigger a carry trade unwind, recalling the 15% KOSPI drop in 2023.
• KOSPI likely to face a difficult second half with macro headwinds; chasing rallies is dangerous.
• Korean semiconductor sector is over-concentrated and should be avoided due to potential underperformance.
• Seasonal weakness from August to October and US midterm elections add uncertainty.
• Investors should maintain balanced portfolios and avoid concentrated bets.