The South Korean won ended at 1,494.5 per dollar, sharply down 15.5 won from the previous session. The global dollar strength was reignited as the U.S. Consumer Price Index (CPI) for April rose 3.7 percent on year, surpassing market expectations and dampening hopes for an early interest rate cut by the Federal Reserve.
Government bond yields retreated across both short- and long-term maturities - signaling a rise in bond prices - reversing the previous day's sharp ascent. Investor sentiment was bolstered as Cheong Wa Dae directly addressed policy uncertainties surrounding the "AI dividend," easing relevant concerns. The three-year treasury bond yield fell 4.2 bps to 3.520 percent, while the 10-year yield dropped 3.8 bps to 3.615 percent.
The benchmark KOSPI surged 2.63 percent on Wednesday to close at 7,844.01, fully recovering from the previous day's 2 percent loss and setting a new record high.
Retail and institutional investors led the rally, net buying 1.89 trillion won (US$1.26 billion) and 1.69 trillion won, respectively. In contrast, foreign investors extended their selling streak, offloading 3.73 trillion won.
The index had initially opened lower following a more than 2 percent drop the previous day, after Kim Yong-beom, the senior presidential secretary for policy, abruptly raised the idea of a dividend from brokerage profits. However, the mood shifted as government officials distanced themselves from Kim's remarks. Expectations also grew for semiconductor stocks ahead of the summit between U.S. President Donald Trump and Chinese President Xi Jinping.
Market heavyweights SK hynix and Samsung Electronics saw divergent fortunes. SK hynix soared 7.7 percent to close at 1,976,000 won ($1,322.25). Meanwhile, Samsung Electronics edged up 1.8 percent to 284,000 won, as its gains were capped by an ongoing general strike despite hopes for the U.S.-China summit.
Hyundai Motor, which held its ground during Tuesday's sell-off, jumped 9.9 percent to end at 710,000 won. The gain reflected delayed positive sentiment following the release of a demonstration video for the "Atlas" humanoid robot by its subsidiary, Boston Dynamics.
Conversely, secondary battery stocks struggled or saw limited gains as the higher-than-expected U.S. CPI pushed back rate cut expectations. LG Energy Solution fell 2.93 percent to 430,000 won, while Samsung SDI edged up 0.8 percent to 634,000 won.
The tech-heavy KOSDAQ slipped 0.2 percent, weighed down by a 4 percent drop in secondary battery leader EcoPro BM, which closed at 197,100 won.
In Japan, the Nikkei 225 gained 0.84 percent to close at 63,272.11. Market leader Toyota Motor led the rise, jumping 3.4 percent to 2,940 yen ($18.85). Honda Motor, which recently scaled back operations and exited some overseas markets like South Korea due to poor performance, also rose 1.3 percent to 1,272 yen.
Having said that, semiconductor equipment makers struggled as the U.S. accelerated the "MATCH Act," which broadly bans exports of semiconductor equipment to China. Advantest fell 1.45 percent to 28,290 yen, and Tokyo Electron dropped 1.57 percent to 51,340 yen.
The TAIEX was the only major regional index to fall, declining 1.25 percent to 41,374.50. The index was hit hard by news that Apple decided to outsource some chip orders to Intel. TSMC fell 1.6 percent to 2,220 Taiwan dollars ($68.41), and MediaTek slumped 5.54 percent to 3,495 Taiwan dollars.
Mainland Chinese shares rallied on expectations for the U.S.-China summit. The Shanghai Composite rose 0.67 percent to 4,242.57, while the Shenzhen Composite climbed 1.67 percent to 16,089.75.
Copyright ⓒ Aju Press All rights reserved.