Japan, South Korea Stocks Open Slightly Higher; SoftBank Rises Nearly 5%, SK Hynix Up Over 3%

TradingKey - During the Asian trading session on June 18, both Japanese and South Korean markets edged higher in early trading. The Nikkei 225 Index opened at 70,163.71, up 0.37%, while the South Korean KOSPI Index opened 0.2% higher at 8,884.92.

Overnight, the Federal Reserve's June policy meeting delivered a strongly hawkish signal. Although the federal funds rate was unanimously held steady at 3.50%–3.75%, the statement's length was cut by more than half, removing all dovish language regarding rate cuts. The dot plot revised the median rate projection for the end of 2026 up to 3.8%, with half of the officials supporting another rate hike this year. The US Dollar Index jumped nearly 50 points in the short term, while US stocks fell under pressure, leading to a cautious opening sentiment across Asia-Pacific markets.

Meanwhile, the Bank of Japan raised its policy rate from 0.75% to 1% last week, the highest level since 1995. With both major central banks leaning hawkish in tandem, the movement of the yen and borrowing costs have become the short-term focus of the market.

In the Japanese market, SoftBank Group traded actively at the open, while Tokyo Electron fluctuated within a narrow range. Financial and real estate sectors diverged on rate hike expectations, with banking stocks turning in a mixed performance. As of press time, SoftBank was up nearly 5%.

[Source: TradingView]

In the South Korean market, Samsung Electronics rose before paring gains, while SK Hynix extended its gains from the previous session. As of press time, Samsung Electronics was down 0.43% at 345,000 won, while SK Hynix jumped 3.25% to 2.603 million won, with its share price hitting another record high. In addition, the CSOP KOSPI 200 ETF will list on the Hong Kong Stock Exchange, becoming the first ETF in Hong Kong to track the index.

[Source: TradingView]

Overall, the Federal Reserve's removal of its rate-cut bias and its upward revision of the interest rate path, coupled with the realization of the Bank of Japan's rate hike, have limited the upside potential of risk assets in the short term. Both markets are in a digestion phase and lack clear directional catalysts. Subsequent performance will depend on the market's further adjustment in pricing the probability of a rate hike this year.