Kospi 'Stirred' by Fed's Interest Rate Freeze Signal... Recovers 6650 Level

▲ Kospi, Samsung Electronics, SK Hynix/AI-generated image

The Kospi surged more than 1% in early trading, buoyed by signals from the Federal Reserve (Fed) to freeze interest rates in September and a strong performance on the New York stock market.

According to cryptocurrency specialized media BeInCrypto on September 4 (local time), the Kospi recorded a 1.14% increase to 6,650 immediately after opening on Friday. This was up 74.88 points from the previous trading day. The domestic stock market, which had plummeted early in the week due to Middle East tensions, continued its recovery trend, driven by the rebound in the US stock market.

Fed Governor Christopher Waller stated that he could support maintaining the benchmark interest rate at the current 3.5-3.75% at the Federal Open Market Committee (FOMC) meeting scheduled for September 15-16. Following Waller's remarks, US Treasury yields fell, and concerns about a September rate hike, which had spread in the market, were somewhat alleviated.

US stock markets all rose by more than 1%. The Dow Jones Industrial Average climbed 1.18%, marking its biggest single-day gain since August 4. The S&P 500 rose 1.06%, and the Nasdaq Composite rose 1.4%. Japan's Nikkei 225 and Hong Kong's Hang Seng Index also started higher, and the KOSDAQ rose even more sharply than the KOSPI.

The next variable for the market is the US August non-farm payroll report. Experts surveyed by Dow Jones projected 53,000 new jobs, a turnaround from a decrease of 23,000 in July. The unemployment rate forecast is 4.1%.

José Torres, Senior Economist at Interactive Brokers, believes that a weakening labor market could influence the Fed's policy decisions. Torres said, “A sustained decline in employment would be enough for the central bank to start considering its employment targets when making policy decisions.” Following the employment report, the market is also closely watching the Consumer Price Index and Producer Price Index to be released next week.

[Article Key Summary]

-The Kospi rose 1.14% immediately after opening, buoyed by the Fed's September interest rate freeze signals and strong New York stock market performance.

-Fed Governor Waller stated that he could support maintaining the benchmark interest rate at the current 3.5-3.75% at the September FOMC.

-In the market, August non-farm employment and next week's inflation indicators are considered key variables that will influence the Fed's September rate decision.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*