South Korean President Yoon Suk Yeol’s surprise decision to impose martial law in South Korea for the first time in more than 40 years — and then just as swiftly reverse course — sparked whiplash in the country’s foreign-traded assets and caught global markets off guard, at one point sending U.S. Treasury yields lower as traders sought a haven from potential instability.
In an emergency address delivered live to the nation, Yoon stunned voters, lawmakers and investors alike by declaring martial law on Tuesday after accusing the opposition of trying to paralyze his administration.
The decision, Yoon said, was made to protect freedom and constitutional order, but the market’s early verdict was swift: South Korean-related ETFs, its currency and most actively traded stocks all sharply weakened, while U.S. government bonds and even bitcoin were also briefly caught up in a risk-off flight to quality.
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