Core Viewpoint - The South Korean government is preparing to transition to a 24-hour trading system for its foreign exchange market, aiming to enhance market accessibility for foreign investors and address the lack of an offshore won market [1][2]. Group 1: Market Opening and Regulatory Changes - South Korea plans to open its foreign exchange market 24 hours a day and relax restrictions on won trading among non-residents, with a roadmap expected by the end of the year [2]. - The current trading hours are from 9 AM to 2 AM the next day, and the government aims to implement these changes sometime next year [2]. - A new settlement system will be established to facilitate 24-hour processing of won payments [2]. Group 2: MSCI and FTSE Russell Inclusion Efforts - The lack of an offshore won market has been a key factor in MSCI classifying South Korea as an emerging market, and the government is making reforms to meet the criteria for inclusion in the MSCI developed markets index [3]. - MSCI has indicated that full currency convertibility and the removal of capital controls are necessary for South Korea to be recognized as a developed market [3]. - The South Korean government is also working towards inclusion in the FTSE Russell Global Government Bond Index, with the timeline for inclusion pushed to April 2026 [5]. Group 3: Market Reactions - Following the announcement, the won depreciated against the dollar, reaching its lowest level since mid-May at 1410.8, with further declines observed [4].

Core Viewpoint - The South Korean government is preparing to transition to a 24-hour trading system for its foreign exchange market, aiming to enhance market accessibility and attract foreign investment [1][3][4]. Group 1: Government Initiatives - President Lee Jae-myung announced plans for a 24-hour foreign exchange market and the removal of restrictions on the Korean won trading [1][3]. - The Ministry of Finance is set to release a roadmap by the end of the year to implement these changes, which include allowing offshore trading of the Korean won [3][4]. - The government aims to eliminate regulatory barriers that currently restrict non-resident foreign exchange trading [3]. Group 2: Market Classification Efforts - The move is part of South Korea's efforts to be included in the MSCI developed market index, which requires fully convertible currency and a more active offshore market [4]. - MSCI has previously indicated that South Korea's gradual measures do not fully meet the criteria for developed market status [4]. - The government has implemented reforms to boost the stock market, with the KOSPI index recently reaching a historical high [4]. Group 3: Currency Market Impact - Following the announcement, the Korean won fell to its lowest level against the US dollar since mid-May, indicating market reactions to the news [5]. - The government is also working towards inclusion in the FTSE Russell Global Government Bond Index, with a phased approach expected to start in April 2026 [7].

Group 1: Market Overview - The South Korean KOSPI index opened high but subsequently fell to 3091.01 points [3] - The Japanese Nikkei 225 index opened high and showed fluctuations, currently up 0.09% at 38826.37 points [5] Group 2: South Korean Market Insights - South Korea was not included in the MSCI developed market index or its watchlist, which was announced on June 24 [3] - MSCI noted improvements in South Korea's market regulations and technical issues, but investor concerns about regulatory risks remain [3] - South Korea must resolve all disputes and complete market reforms before being reconsidered for inclusion in the developed market index, with eligibility for review only in June next year [3] Group 3: Japanese Market Insights - Electronic and brokerage stocks led gains in Japan, with companies like Mitsubishi Electric and Tokyo Electron rising over 2% [6] - Olympus's stock fell over 10% due to an FDA import warning on its products [7] - The yield on Japan's 10-year government bonds dropped to 1.4%, while the 20-year yield fell by 2 basis points to 2.32% [8] Group 4: Economic Commentary - A Bank of Japan committee member emphasized the need for normalization of government bond holdings, noting the economy is at a crossroads between growth driven by wage increases and investment, and stagnation [9] - Despite the lack of direct impact from U.S. tariff policies observed so far, Japan's economy appears to be stagnating [9] - The committee member indicated that inflation pressures may arise as the economy transitions, with consumer price index (CPI) levels higher than expected [9]