Why Are Korean Stock Prices Sluggish?

Recently, the Korean stock market has been in a continuous bear market that seems to have given up on rising.
There are probably many reasons, but we would like to look at the exchange rate as one of those reasons.
Let's take an example. Suppose there is a foreigner who has bought Korean stocks.
If they bought won at 1,400 won per dollar when exchanging dollars into won, and the exchange rate later rose to 1,450 won, this foreigner incurs a loss due to the exchange rate.
If they judge that the exchange rate will keep rising, foreigners will sell their stocks regardless of stock prices in order to reduce their losses.
Looking at Korean stock prices in November and December 2024, we can see that they failed to rise and have been under downward pressure.
Based on past data, foreigners must buy for the Korean market to rise. However, foreigners are not readily buying due to exchange-rate risk.
The biggest reason Korea's exchange rate has now reached 1,450 won is the strength of the dollar.
In other words, because the U.S. economy is doing so well, there is no need to quickly lower high dollar interest rates. As a result, many investors are selling won and buying dollars, which is why the won exchange rate remains at a high level.
There may be many other causes for the bear market in Korea, but because the exchange rate has a very large impact on the stock market, this must be addressed first.
If U.S. Federal Reserve Chair Powell says he will cut interest rates quickly, the value of the dollar will fall, Korea's exchange rate will stabilize, and stock prices will also stabilize somewhat.
If you invest in stocks, you must be well aware of exchange rates.