Daily Woody Weekly | Aug 9, 2026 — Seven Weeks Down: Chips, a Jobs Shock, and the Yen
The KOSPI fell more than 5% this week to close Friday at 6,258.77, its seventh straight weekly loss and the longest such streak since December 2022, according to Reuters. The index has now shed 31% from its June 22 record close, though it remains about 48% higher for the year.
Thursday broke the week. The index slumped 4.58% after Samsung Electronics fell 6.3% and SK Hynix 10.4%, with foreign investors dumping roughly $2.3 billion of Korean shares in a single session. The trigger came from overnight U.S. trading: the Philadelphia Semiconductor Index declined, and SanDisk plunged after issuing next-quarter guidance that missed expectations despite solid earnings. Daishin Securities analyst Lee Kyung-min said the guidance miss dampened sentiment across the memory sector and that the chip decline drove the broader index lower. SK Hynix ended the week down 13%, its worst weekly loss since mid-July.
The divergence beneath the index was just as striking. The tech-heavy KOSDAQ, fueled by retail money rotating out of the large caps, jumped about 11% for the week. And the won strengthened to 1,418.8 per dollar on the onshore settlement platform, on course for a sixth consecutive weekly gain, Reuters reported. Stocks falling for seven weeks while the currency rises for six is not a typical crisis pattern.
Markets spent the week bracing for Friday's U.S. employment report, the first major data release since Fed Chair Kevin Warsh scrapped forward guidance. The print landed far outside the range: nonfarm payrolls fell by 23,000 in July, against a Dow Jones consensus of an 83,000 gain. May and June were both revised down, leaving the 12-month average at just 34,000 jobs a month.
The unemployment rate slipped to 4.1%, but for an uncomfortable reason. Some 264,000 people left the labor force, pushing participation down to 61.4%, its lowest in more than five years. "That is mostly for the wrong reason—not enough workers," wrote Bill Adams, chief U.S. economist at Fifth Third, in comments carried by CNBC. The details were less dire than the headline: private payrolls actually rose by 30,000, while government jobs fell by 53,000, much of it in local school employment that economists say could be revised away.
Rate markets moved fast. The probability of a Fed hike fell from 58% to 44% after the release, according to CME FedWatch data cited by the Korea Economic Daily, and equity futures rose as the dollar softened. For Seoul, where foreign flows track U.S. rate expectations, the report cuts both ways: less tightening pressure, but a weaker American consumer behind the AI capex boom.
Korea's second comprehensive special counsel, led by Kwon Chang-young, on Friday indicted Yoo Byung-ho, a commissioner of the Board of Audit and Inspection, on abuse-of-authority charges — and kept him in detention. The team alleges that Yoo, while serving as the audit board's secretary general in early 2023, took requests from the presidential office his own agency was auditing. He then blocked his auditors from demanding documents and questioning officials over the relocation of the presidential residence. Yoo was arrested on July 20; a court rejected his release petition on Thursday.
A day earlier, former Land Minister Won Hee-ryong sat for a second round of questioning over the Seoul–Yangpyeong expressway case. Investigators allege the highway's endpoint was moved to benefit land owned by the family of Kim Keon Hee, the imprisoned former first lady, and that Won then scrapped the project without due process once the scandal broke. Won denies wrongdoing and called the investigation unlawful. He has declined to unlock his seized phone, so investigators sent it to the national forensic service.
The counsel's mandate expires on August 23, its final legally permitted extension. Whatever is not indicted in the next two weeks will define what this six-month investigation amounted to.
A revision to the Criminal Procedure Act stripping prosecutors of their remaining investigative powers passed the National Assembly on July 31, in a 175–2 vote after the ruling Democratic Party used its three-fifths majority to cut off a 24-hour opposition filibuster. The Kyunghyang Shinmun called it the first complete abolition of prosecutorial investigative authority in the 78 years since the republic's founding. This week was the new system's first week, and the aftershocks came daily.
The acting prosecutor general, Koo Ja-hyun, resigned within hours of the vote. The Supreme Prosecutors' Office has argued the law could gut prosecutors' constitutionally guaranteed power to request warrants, setting up a likely Constitutional Court challenge. On Tuesday, the Cabinet approved the revision. President Lee Jae-myung, who had earlier suggested prosecutors might need to keep some investigative role in exceptional cases, called the separation of investigation and prosecution "an inevitable measure" — remarks that effectively closed the door on a veto.
Under the new law, prosecutors may only ask police to conduct supplementary investigations, which police must generally complete within a month. Two new agencies, a Serious Crimes Investigation Agency and a Public Prosecution Office, launch on October 2.
Japan's Ministry of Finance disclosed on Friday that authorities spent a record 6.28 trillion yen ($39.64 billion) buying yen on April 30 alone, the largest single-day intervention in records dating back to 1991, Reuters reported. Three operations over the thin-liquidity Golden Week holidays totaled about $74 billion. The yen still resumed its slide, hitting 40-year lows below 163 per dollar in July.
That forced an escalation. Late last month Tokyo intervened again, this time jointly with Washington. Central bank data suggest Japan may have spent as much as $59 billion on July 30 and a further $37 billion the next day, potentially the largest yen-buying operation ever. Official records are due August 28. To calm doubts about Japan's firepower, the two governments have said Japan can tap a pandemic-era Federal Reserve facility to raise dollars without selling U.S. Treasuries outright. A Reuters timeline also cited a market source as saying South Korea was selling dollars in coordination with Japan during the July operation.
The verdict so far is mixed. The joint action drove the yen from above 163 to around 155 by Monday, but by Friday it had drifted back past 158, keeping markets on alert for the next round.
| Indicator | Friday close | Week |
|---|---|---|
| KOSPI | 6,258.77 | −5.10% |
| KOSDAQ | 798.81 | +10.98% |
| USD/KRW | 1,418.8* | 6th weekly gain for the won |
*Onshore settlement platform, per Reuters.
Context for the drawdown: July was the KOSPI's steepest monthly fall since the 2008 financial crisis, down 22%, according to Investing.com — a correction concentrated in AI-linked chip names after a first-half rally that still leaves the index up about 48% this year. Foreign money kept leaving the large caps this week while retail investors piled into KOSDAQ names, and money also rotated into batteries, banks and pharma. Kiwoom Securities argued the pullback is a digestion phase, with earnings upgrades keeping the medium-term case intact.
Heat and tropical nights continue nationwide. Strong rain falls on the east coast today and Monday, with 20–60mm forecast along the Gangwon and North Gyeongsang coasts and more than 80mm in places; scattered afternoon showers of 5–60mm are possible across inland areas today. Rough seas and high swells warrant caution along the south and east coasts and Jeju.
| Sun (9th) | Mon (10th) | Tue (11th) | Wed (12th) | |
|---|---|---|---|---|
| Low | – | 21–26°C | 19–25°C | 17–25°C |
| High | 26–35°C | 27–34°C | 27–35°C | 27–34°C |
What moved prices this week was disclosure. One line of guidance from a U.S. memory maker erased 301 points in Seoul on Thursday. On Friday night, Washington's payroll count replaced a forecast of 83,000 new jobs with a reality of 23,000 lost ones, and the odds of a Fed hike gave up 14 percentage points on the spot. The same day, Tokyo's finance ministry published a three-month-old receipt: a $40 billion single day of yen-buying that, the record now confirms, could not hold the line for two months.
Three cities, three kinds of numbers, one mechanism. The force in each case was the gap between what markets had penciled in and what the print said. The 106,000-job distance between forecast and fact did more damage than the 23,000 figure itself. A market this saturated with expectations converts every miss into a day of volatility, and Korea's seven-week slide, retraced step by step, is a staircase of exactly such misses.
The next gap is already scheduled. Wednesday night, Korean time, the United States publishes its July inflation figures.
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