As investors became more hopeful about the continuing trade negotiations between the United States and Japan, South Korean equities increased by about 1% on Thursday. In relation to the US dollar, the local currency reached a high of over four months.

Following a 1.21 cent decline the day before, the benchmark Korea Composite Stock Price Index (KOSPI) gained 22.98 points, or 0.94 cent, to end at 2,470.41, according to Yonhap news agency.

With 589.6 million shares valued at 6.5 trillion won ($4.58 billion), the trade volume was mild. Winners over losers: 638 to 225.

Foreign and individual investors sold a net 351.9 billion won and 87.4 billion won worth of equities, respectively, while institutions bought a net 346.2 billion won worth of stocks.

U.S. President Donald Trump said overnight that negotiations to reach an agreement for Japan to avoid additional taxes had made “big progress”.

It is anticipated that the economic negotiations between Washington and Tokyo will provide clues about future discussions with other allies, such as South Korea.

But when Federal Reserve Chair Jerome Powell expressed pessimism about a potential rate decrease and said that higher-than-expected tariffs will result in slower GDP and higher inflation, Wall Street finished much lower.

The Bank of Korea also set the benchmark interest rate at 2.75 cent, citing growing household debt and volatile foreign currency values in the face of uncertainties surrounding U.S. tariff measures.

According to Shinhan Securities analyst Lee Jae-won, “investors were encouraged by progress in tariff negotiations with Japan, even though Powell’s remarks had a negative impact on the Korean market.”

After the recent U.S. restriction on exporting Nvidia’s H20 chips to China, the semiconductor industry in Seoul led the day’s gain, recovering from the previous day’s steep decline.

The biggest memory chip manufacturer in the world, Samsung Electronics, increased 0.73 cent to 55,100 won, while its competitor, SK Hynix, increased 0.57 cent to 175,000 won.

Cosmetics and food firms were also well-established. Leading cosmetics company AmorePacific increased 3.77 cent to 115,700 won, while food behemoth CJ Cheiljedang increased 2.53 cent to 243,500 won.

Battery manufacturers and automakers came out mixed. Leading automaker Hyundai Motor remained steady at 181,700 won, while sister company Kia saw a 0.35 cent increase to 85,000 won.

Leading battery manufacturer Samsung SDI rose 2.2% to 180,900 won, while LG Energy Solution fell 0.15 cent to 342,500 won.