Japan Wants Yen Carry Unwinding.. Will It Become a Signal to Break the Bull Market? 'Reasons Why the Korean Stock Market Is Still Strong' | Byun Jeong-gyu, Senior Head, Daiwa Securities

Summary

Byun Jeong-gyu, Senior Head at Daiwa Securities, discusses the sustained high oil price driven by geopolitical tensions in the Middle East, the resulting inflation risks, and the cautious outlook for Korea's rapidly rising KOSPI. He also analyzes Japan's yen carry trade dynamics and explains that unwinding is not imminent until mid-next year. The conversation covers foreign investment trends, energy costs, and monetary policy implications.

• Oil prices expected to stay elevated in $80–90+ range due to unresolved Hormuz strait and resource weaponization.
• High oil prices will prolong global inflation and affect manufacturing and service costs.
• KOSPI has risen too fast, exhibiting signs of overheating; caution is recommended.
• Japan's yen carry trade unwinding is unlikely before mid-next year, so near-term risk is limited.
• Foreign investors are increasingly interested in Korean stocks for the long term, supported by semiconductor strength.
• Gold's upside is conditional on potential Fed rate hikes; current dollar valuation favors dollar over gold.
• Japan's monetary policy aims to gradually raise rates to encourage domestic investment and yen repatriation.
• The Korean market's recent rally is largely driven by semiconductor heavyweights, making non-semiconductor sectors appear more expensive.