증시 대담
It's time now for an in-depth look at the market action today.
And for that, I'm joined on the line by Dr. Hwang Seiwoon, research fellow at the Korea Capital Market Institute.
Dr. Hwang, thanks for coming on today.
You're welcome.
Wall Street overnight was mixed. Korean shares today recovering from the very rough couple of days they had earlier in the week. What's the story today?
As you mentioned, the Dow Jones Industrial Average fell slightly Tuesday notching a three-day losing streak. Before the close, however, the Dow briefly turned positive. Investors awaited more clues to the Federal Reserve’s next monetary policy move. Fed Chair Jerome Powell is scheduled to testify in front of the House Financial Services Committee on Wednesday. Investors will be looking for clues on whether the Fed will cut rates later this month, as it is widely expected, or if the central bank thinks the economy is strong enough to maintain current monetary policy.
Asian shares inched ahead on Wednesday while higher Treasury yields lifted the dollar as markets wondered if the Fed would confirm or confound expectations for U.S. policy easing this month. South Korea’s KOSPI climbed 0.43%, but Japan's Nikkei lagged with a loss of 0.15%.
Now the investment bank Morgan Stanley has lowered its growth forecast for the Korean economy from 2-point-2 percent down to 1-point-8 percent. Why is that, and combined with everything else going on is there a credit risk here for Korea?
International analysts are lowering Korea's growth rate projections for this year. Morgan Stanley slimmed it down to 1.8 percent from 2.2 percent while ING Group and Nomura Securities lowered it to 1.5 percent and 1.8 percent, respectively. Morgan Stanley said South Korean economy would be subject to additional downward pressure due to Japanese export restrictions. Morgan Stanley's growth rate projection is 0.6 percentage points lower than the government's estimate.
Korea is one of the countries most exposed to the uncertainties of US-China trade disputes in Asia. In addition to this, Japanese economic retaliation against South Korea will increase the downward pressure on economic growth. Moody's, the global credit rating agency, also referred to the Korea - Japan trade dispute as an economic risk. If Japanese export restrictions make Korean economy which is already sluggish even worse, then the country credit rating on South Korea may be affected negatively. Down-grading is quite unlikely, but credit outlook can be revised in case of tension escalation.
On Tuesday, Korea denounced Japan's new trade restrictions at the WTO, and it's also planning to bring it up at another WTO meeting later this month.
Korea is saying the meaures are retaliatory and that they go against the principle of free trade. What's the argument from the Korean side?
During a meeting of the WTO Council for Trade in Goods in Geneva on Tuesday, Seoul expressed regrets over Japan's curbs on exports of key materials used in sem
