South Korean President Yoon Suk Yeol abruptly announced plans to impose an emergency period of martial law on Tuesday, although back-tracked on the shock order shortly afterward.
"But also, there is a semiconductor cycle that is starting to form on the downside, and in addition the auto sector is quite impaired globally — and they are heavily represented in the Korean market," he continued. Rory Green, chief China economist and head of Asia research at TS Lombard, said in a research note published Wednesday that negative price action and volatility is likely to continue across Korean assets and interlinked markets, particularly Asian foreign exchange markets.
"Martial law hasn't been introduced since 1979 and is seen as deeply negative. So, the reversal of it is positive. However, it has introduced a lot of political uncertainty moving forward, particularly the future of President Yoon," Nguyen told CNBC's"Squawk Box Asia" on Wednesday. "For a start, new reports are now suggesting that Yoon will be impeached or resign fairly quickly, which might help investors further draw a line under the affair," Thomas Mathews, head of markets for Asia Pacific, at Capital Economics, said in a research note published Wednesday.