The Bank of Korea noted that the United States' reciprocal tariff measures were stronger than expected and stated it would strengthen market monitoring.
Bank of Korea Vice Governor Yoo Sang-dae held a 'market situation assessment meeting' on the morning of the 3rd to examine the impact of the United States' reciprocal tariff announcement on the international financial market and domestic financial and foreign exchange markets.
On the 2nd (local time), the U.S. government announced an executive order to impose a basic tariff of 10% on all trading nations, along with reciprocal tariffs on individual countries with large trade surpluses. Accordingly, South Korea will face a reciprocal tariff of 25%, Japan 24%, China 34%, and the European Union (EU) 20%.
Following the announcement of the reciprocal tariffs, risk-averse sentiment in the international financial market has strengthened, causing significant declines in U.S. government bond yields and stock prices. The yield on 10-year U.S. government bonds fell by 9 basis points (1 basis point = 0.01 percentage points), while the Standard and Poor's (S&P) 500 futures dropped by 2.8% and the Nasdaq futures fell by 3.9%.
Vice Governor Yoo stated, "The United States' reciprocal tariff measures were strong, given that tariff rates were high by country and the targeted countries were diverse," and noted that "there is a high possibility of increased volatility in financial markets depending on the responses from major countries and future developments."
He stated, "Through a 24-hour monitoring system linked with overseas offices, we will closely monitor the developments of related risk factors and the situation in domestic financial and foreign exchange markets, and respond in a timely manner if necessary," adding that "we will continue to assess the impacts of changes in global trade conditions, growth, prices, and currency policies in major countries, as well as the ripple effects on the domestic economy."