South Korea’s advance GDP data for the second quarter showed a robust 0.6% increase quarter-on-quarter and a 3.7% rise year-on-year, according to Commerzbank. This growth exceeded expectations, driven by strong semiconductor demand linked to AI technologies and resilient domestic spending.
Commerzbank highlighted that these factors underpin the positive economic momentum, reinforcing market anticipation of a 25 basis point interest rate hike by the Bank of Korea in August. The central bank is expected to respond to the strong economic indicators to manage inflation and support continued growth.
For Japanese investors and FX traders, the South Korean Won may see increased volatility ahead of the Bank of Korea’s policy decision, with implications for regional currency and equity markets.