[Morning Briefing] Yen carry trade liquidation concerns… New York stocks·Bitcoin fall in unison

◆New York markets fall across the board on speculation of a Bank of Japan rate hike… Dow 0.9%↓

The three major New York indices fell together. On the 1st local time, the Dow Jones index closed at 47,289.33, down 0.9% from the previous session; the S&P 500 fell 0.53% to 6,812.63; and the Nasdaq fell 0.38% to 23,275.92. There had been expectations that the U.S. Federal Reserve's (Fed) quantitative tightening had officially ended, supplying dollar liquidity and leading to a year-end 'Santa rally,' but the Bank of Japan (BOJ) dampened that by hinting at a policy rate increase in December. The yen carry trade, in which funds are borrowed in low-interest-rate Japan to invest in overseas assets, had supplied liquidity to the market, and concerns spread that if the BOJ raises rates on the upcoming 18~19th, these funds could be withdrawn en masse.

◆Bitcoin breaks below $84,000… crypto assets plunge across the board

Bitcoin, which at one point rose to $126,000, plunged amid Wall Street's risk-off mood. On the global coin market tracking site CoinMarketCap, Bitcoin fell as low as $83,862 that day, breaking below $84,000. As of 6:30 a.m., it had recovered to $86,373, down 5.18% from 24 hours earlier. Ethereum, the second-largest crypto by market capitalization, also plunged 7.71% to $2,791, and fourth-ranked Ripple traded down 7.07% at $2.03. Because crypto assets are highly dependent on cash liquidity, a large-scale liquidation of yen carry trades is expected to inflict an even greater shock.

◆South Korea and the U.S. to swiftly implement joint fact sheet… establish sectoral working groups

South Korea and the U.S. held a deputy foreign ministerial meeting in Washington, D.C., and agreed to form sectoral working groups to promptly implement the joint fact sheet agreed at the Korea-U.S. summit. After meeting with Christopher Lando, U.S. State Department Deputy Secretary, Park Yoon-joo, First Vice Minister of Foreign Affairs, explained, "There was a consensus to implement promptly and proactively," and "We agreed to discuss multiple issues in parallel." The fact sheet included U.S. approval for South Korea's construction of nuclear-powered submarines and language supporting procedures that would lead to civilian uranium enrichment and used nuclear fuel reprocessing for peaceful use in Korea.

◆Arirang-7 reaches orbit… first early-morning contact successful

Arirang-7, an ultra-high-resolution observation satellite developed with domestic technology, succeeded in its first contact with the Antarctic Troll ground station. Arirang-7 was launched into space at 2:21 a.m. that day aboard Arianespace's Vega-C from the Guiana Space Center in Kourou, French Guiana. It separated from the payload 43 minutes and 54 seconds after launch, entered orbit, and successfully completed first contact at around 3:30 a.m. The Korea Aerospace Administration plans to attempt a total of four contacts before making a final announcement on the success of the satellite launch. Equipped with a 0.3 m-class high-resolution optical camera, Arirang-7 will carry out precise observations of the Korean Peninsula from a sun-synchronous low Earth orbit at around 500 km for the next five years.

◆"Bring warm clothes"… severe cold with lows around minus 5°C

On Tuesday the 2nd, cold air moving south from the north will leave morning temperatures below freezing in most parts of the country. According to the Korea Meteorological Administration, morning lows will be -5~5°C and daytime highs 1~13°C, lower than normal for the season. In particular, inland Gyeonggi and inland/mountainous Gangwon are expected to drop to around minus 5°C, and strong winds will make the wind chill feel even colder. From night, rain or snow will begin on the west coasts of South Chungcheong and North Jeolla, in southern inland areas, and on Jeju Island. Expected snowfall amounts are around 5 mm for the west coasts of South Chungcheong and North Jeolla and southern inland areas, and 5–10 mm for Jeju. Fine dust concentrations are expected to be at 'Good' levels across all regions.

Oh Se-sung, Hankyung.com reporter sesung@hankyung.com