Bank Of Korea Cuts Key Rate For First Time Since 2016

South Korea's central bank lowers rate amid Japan trade row:The Asahi Shimbun

South Korea's central bank lowers rate amid Japan trade row:The Asahi Shimbun

Seoul played up trade diplomacy in hopes to sway worldwide support on its bid to overturn Tokyo's export controls that can impair manufacturing of high-tech exports crucial to Korean economy.

"The addition of the Japan-South Korea trade tensions into the mix was perhaps the final straw that tipped the BoK over into calling for a rate cut, against a market consensus of a 15/10 hold/cut", said Howie Lee, an economist at OCBC Bank.

"As for sending an envoy to Japan, ".

Earlier on Thursday, South Korea's central bank lowered its policy rate for the first time in three years to combat a faltering economy that faces further risks created by the trade row with Japan.

"Our economic assessment reflected Japan's imposition of export restrictions as they will have considerable effects on our economy", he added, referring to Japan's curbs on exports to South Korea of key materials for chip and display production.

An emergency cooperative body for the pan-governmental countermeasures in cooperation with the political parties will be launched, said the statement.

Without any mutually acceptable deal, Japan has called for third-nation arbitration, which South Korea has dismissed.

"The government is appealing to the public's emotions, but emotions and words can not solve the problem", Hwang said.

With its priority placed on strengthening relations between itself and the two close allies, he said the United States will "do what it can to support their efforts to resolve". "More efforts are needed to resolve the issue to prevent that from happening".

"I think you understand the issue, you understand the challenges ahead".

These and other agreements were reached at the meeting of President Moon Jae-in and the leaders of five parties: Rep.

"Japan's export regulations were partly reflected in macroeconomic assessment, including growth", the governor said.

Japan has restricted exports of three chemicals crucial to South Korea's tech sector and used by major firms including Samsung Electronics and SK Hynix in the manufacture of microchips and smartphones.

Last year, a Supreme Court of Seoul had ordered two Tokyo's firms to compensate the wartime labourers in a verdict that Japan believed breached worldwide law.

Tokyo says the materials affected by the export controls can be sent only to trustworthy trading partners. It will also allow Japanese authorities to restrict any export to South Korea when they believe there are security concerns. It has enabled Seoul and Tokyo to share military intelligence regarding North Korea.