Inflation Overshoots Target For Third Month

Inflation figures from South Korea showed price increases slowed in June, Y/Y prices rose 2.4% against 2.5% expected and down from a nine-year high print of 2.6% in May. On the month prices fell 0.1%, while core CPI rose above estimates at 1.5% against estimates of a 1.4% rise.

• Last month after inflation hit a nine-year high the BoK sought to temper inflation fears saying the gains were largely boosted by last year's plunge in oil prices and were in line with its expectations. This is the third straight month that prices have risen above the BoK's 2% target. Last week the BoK raised forecasts for growth and inflation, and said that while inflation may overshoot target in the short-term it will pull back as the year progresses. BoK Governor Lee has also said that the time is approaching when the Bank will begin to normalise policy.