Korea CPI data for June printed above expectations once again. The headline rose by 0.6% MoM (versus 0.5% expected and 0.7% previously), while the YoY pace came in at 6.0% (5.9% forecast, 5.4% last month). Core inflation was also stronger than expected at 4.4% YoY (4.2% expected and 4.1% previously).
- This is the strongest headline rate of inflation since November 1998, while core inflation is at its strongest pace since early 2009.
- Recall last week onshore media reported that calls for a 50bps hike from the BoK would intensify if June CPI printed at 6% (according to an identified central bank official).
- Note the central bank meets on July 13th, next Wednesday.
- Also out earlier was South Korean FX reserves for June. They fell to $438.28bn, from $447.71bn last month. This continues the recent trend of declines, as the BoK battles won depreciation pressures. Note the DXY was up nearly 3% in June, so valuation dynamics also likely played a role in this drop.