After South Korea courts ruled Japan to compensate them, Japan decided to curb export. (Image via Japan Times)

Japan's Export Curbs Makes South Korea's Stocks Drop

Toska Dhia Andana
Market & Investment
Stocks & Bonds
Jul 04, 2019
2259
Japan and South Korea are currently in a tension once more. Last week, South Korean courts ruled Japanese companies to compensate South Korea, related to the factories and mines work in 1910-1945, during the colonization. However, Prime Minister Shinzo Abe responded that they will not export materials for South Korea’s tech industry anymore.

Companies in Japan actually control 90% of the polyimide market for screen application. South Korea’s companies, on the other hand, needed the materials for their tech companies such as Samsung Electronics Co. and LG Displays Co. Both of these companies use OLED screens for their smartphones and televisions. The demand for their products has risen as well, which is why Japan’s decision not to import materials wasn’t taken lightly by South Korea.

The affected South Korean companies were asked to comment about this matter. Samsung revealed they will study the issue, while SK Hynix and LG Electronics did not make any comment. For LG Display, they revealed they are not using polyimide from Japan. Nonetheless, they predicted that Japan’s export curb will affect the supply of hydrogen fluoride.

Due to Japan’s decision, it is reported that Seoul stock market’s main KOSPI drops 7.71 points or 0.36 percent at 2,122.03 points. LG Display also fell by 2% while Samsung dropped by 0.9%.

South Korea responded to Japan’s announcement as well. A South Korean trade ministry official Park Tae-Sung told the reporters that Japan has violated World Trade Organization according to the agreements. However, Japan defends back by saying the export curb is in line with the WTO’s rules.

Source: https://www.bloomberg.com/news/articles/2019-07-01/japan-plans-some-tech-export-curbs-in-spat-with-south-korea

Japan , SouthKorea , Export , Samsung , LG