South Korea's KOSPI Index ended the trading session up 0.7%, settling at 6,345.53 points, marking its second consecutive daily gain.

The advance was driven by a surge in chipmaker Samsung Electronics, whose shares jumped 4.13%, while peer SK Hynix added 0.35%. However, market sentiment remained cautious due to ongoing tensions in the Middle East.

Where to focus

U.S. President Donald Trump on Monday responded to Iran's compensation demands by raising new requests, also calling for payments from Iran for "deaths caused during wars, attacks, and protests," a move that could further complicate efforts to reopen the Strait of Hormuz.

Key economic data

Data released on Tuesday showed that South Korea's exports for the first 10 days of this month surged 45.3% year-on-year. Finance Minister and Deputy Prime Minister for Economic Affairs Hyun Oh-seok stated that trading volumes for single-stock leveraged exchange-traded funds (ETFs) have declined following the government's supplementary measures, and that authorities will deploy all available policy tools to reduce market volatility.

Monetary policy outlook

Outgoing Bank of Korea Vice Governor Ryu Sang-dae said on Tuesday that, barring a major shock, the central bank is highly likely to raise interest rates further to combat persistent inflationary pressures. "Unless there is an extraordinary shock or a special factor, the probability of another rate hike is very high," Ryu told a press conference, noting his three-year term ends on August 20. "Monetary policy must be set in a forward-looking and preventive manner, so from the perspective of economic growth and inflation outlook, one more rate hike is still necessary," added Ryu, a member of the central bank's seven-person monetary policy committee.

Inflation and growth dynamics

Last month, the Bank of Korea raised interest rates for the first time in three and a half years and hinted at further tightening. Robust growth in Asia's fourth-largest economy has fueled inflation risks, with some monetary policy committee members recommending precautionary measures. Ryu emphasized that the central bank is more focused on demand-driven inflation than any potential supply shock from the Middle East conflict, as the domestic economic recovery is expected to generate gradual and sustained upward price pressure. He added that the recent won appreciation and stock market volatility may require more in-depth discussion among committee members, but these factors are not the primary drivers of policy decisions.