South Korea's president denies wrongdoing in a growing scandal

SEOUL, South Korea (AP) — South Korean President Yoon Suk Yeol denied wrongdoing Thursday in a burgeoning influence-peddling scandal involving him and his wife that’s severely hurting his approval ratings and providing political munition to his rivals.

The political firestorm coincides with South Korea facing a slew of critical foreign policy issues, such as Donald Trump’s election win to become the next president of the United States and North Korea’s reported entry into the Russia-Ukraine war.

The scandal centers around allegations that Yoon and first lady Kim Keon Hee exerted inappropriate influence on the conservative ruling People Power Party to pick a certain candidate to run for a parliamentary by-election in 2022 at the request of Myung Tae-kyun, an election broker and founder of a polling agency who conducted free opinion surveys for Yoon before he became president.

For weeks, the scandal has been making headlines in South Korea as Myung's leaked phone conversations show he boasted of his influence over the presidential couple and other top ruling party officials.

Asked about his ties with Myung during a press conference Thursday, Yoon said, “I didn’t do anything inappropriate and have nothing to hide regarding Myung Tae-kyun.”

Yoon said he has never meddled in any candidate nomination processes at the PPP, and had never asked Myung to carry out surveys for him, though he acknowledged that Myung gave him some sort of help during his presidential primary campaign in 2021.

The main liberal opposition Democratic Party said Yoon's response only showed his “arrogance" and “self-righteousness." The party earlier demanded Yoon apologize, reshuffle top officials and accept an independent investigation into his wife.

The Democratic Party recently shared what it said was an audio file of phone calls between Yoon and Myung on May 9, 2022 — a day before Yoon took office for a single five-year term. The opposition party alleges that the conversation proves Yoon provided Myung with political favors in return for free surveys.

In the audio file, Yoon can be heard telling Myung that he asked a PPP committee to pick senior party member Kim Young-sun to run for one of the parliamentary by-elections the following month. Kim Young-sun eventually obtained the party’s nomination and won the election.

In the file, Myung is heard saying, “I really won’t forget this favor for my entire life. Thank you!”

South Korea’s election law bars public servants, including the president, from interfering in elections, but applies no such restrictions to a president-elect, so it's unclear whether Yoon violated the law.

Recent surveys showed Yoon's approval rating fell below 20% for the first time since his inauguration. Kim Keon Hee has been grappling with other scandals, such as spy camera footage purportedly showing her accepting a luxury bag as a gift from a pastor.

Yoon apologized for causing public concerns about him and his wife, but stressed that many of the allegations raised were not consistent with the facts.

Some ruling party lawmakers have accused the Democratic Party of deliberately ramping up political attacks on Yoon and his wife in an effort to rescue its embattled leader, Lee Jae-myung, from legal troubles.

Lee, a firebrand lawmaker who narrowly lost to Yoon in the 2022 presidential election, is undergoing four separate trials over corruption and various other allegations. The first two district court rulings on Lee over his election law violation and perjury charges are set for Nov. 15 and Nov. 25. Either a prison sentence or a fine of more than 1 million won ($750) in the election law case would unseat Lee as a lawmaker and disqualify him from running in elections for five years, although he is likely to appeal any guilty verdict.

Surveys show Lee is the early favorite for the 2027 presidential race to succeed Yoon.

On foreign policy, Yoon — who has worked closely with Washington and Tokyo to solidify security cooperation in the face of North Korean threats — expressed optimism that the three-way partnership will continue to expand under Trump’s government. He said he wants to meet Trump and new Japanese Prime Minister Shigeru Ishiba soon to coordinate policies.

During his previous presidency, Trump engaged in highly orchestrated nuclear summits with North Korean leader Kim Jong Un. Yoon noted that North Korea’s arsenal has significantly advanced since Trump’s diplomacy with Kim collapsed in 2019.

Yoon said Trump “will be receiving comprehensive reports very soon about how North Korea’s nuclear technologies and capabilities have changed since then."

“After he receives these reports, I think we can have more meaningful and in-depth discussions when we have the opportunity to meet," Yoon said.

When asked about concerns that Trump’s “America first” approach would damage South Korean interests in trade through increased tariffs and other measures, Yoon said Seoul was making “multifaceted efforts to minimize the losses to our people’s economy.”

“Things can’t be exactly the same as they were during the Biden administration,” he said, “but we have been preparing to hedge these risks for a long time."

Earlier Thursday, Yoon had a telephone call with Trump, congratulating him on his election win and discussing strengthening bilateral cooperation. The two agreed to arrange an in-person meeting soon, according to Yoon’s office.

Prospects for South Korea-U.S. relations under Trump “could depend on whether Yoon is able to strike up positive chemistry with Trump immediately during the transition and foster a close personal friendship to convince him to want to support advance Seoul’s interests,” said Duyeon Kim, a senior analyst at the Center for a New American Security in Washington.

“This might be the only way to avert devastating consequences and surprises in the alliance relationship — including South Korean questions about Washington’s defense commitment — that we currently assume would happen based on Trump’s harsh rhetoric against allies and transactional style,” she said.

South Korean President Yoon Suk Yeol arrives for a news conference at the Presidential Office in Seoul, South Korea, Thursday, Nov. 7, 2024. (Kim Hong-Ji/Pool Photo via AP)

South Korean President Yoon Suk Yeol answers a reporters' question during a news conference at the Presidential Office in Seoul, South Korea Thursday, Nov. 7, 2024. (Kim Hong-Ji/Pool Photo via AP)

South Korean President Yoon Suk Yeol arrives for a news conference at the Presidential Office in Seoul, South Korea, Thursday, Nov. 7, 2024. (Kim Hong-Ji/Pool Photo via AP)

South Korean President Yoon Suk Yeol attends a news conference at the Presidential Office in Seoul, South Korea, Thursday, Nov. 7, 2024. (Kim Hong-Ji/Pool Photo via AP)

South Korean President Yoon Suk Yeol answers a reporters' question during a news conference at the Presidential Office in Seoul, South Korea Thursday, Nov. 7, 2024. (Kim Hong-Ji/Pool Photo via AP)

South Korean President Yoon Suk Yeol answers a reporters' question during a news conference at the Presidential Office in Seoul, South Korea Thursday, Nov. 7, 2024. (Kim Hong-Ji/Pool Photo via AP)

South Korean President Yoon Suk Yeol answers a reporters' question during a news conference at the Presidential Office in Seoul, South Korea Thursday, Nov. 7, 2024. (Kim Hong-Ji/Pool Photo via AP)

Shares were mostly higher in Europe and Asia on Thursday after U.S. stocks stormed to records as investors wagered on what Donald Trump’s return to the White House will mean for the economy and the world.

Markets also were turning their attention to the Federal Reserve’s decision on interest rates, due later in the day.

In early European trading, Germany's DAX gained 0.8% to 19,196.73. In Paris, the CAC 40 was nearly unchanged, at 7,368.10. Britain's FTSE 100 edged 0.2% higher to 8,182.27.

The futures for the S&P 500 and the Dow Jones Industrial Average were up 0.1%.

In Asia, Japan's Nikkei 225 fell 0.3% to 39,381.41, reflecting worries over the potential for a revival of trade tensions under a Trump administration.

“I think everybody’s going to be worried about Trump's tariffs because that’s one of the things in his playbook. And so we’ll have to see how things develop in the early stages of his presidency this time," said Neil Newman, head of strategy for Astris Advisory Japan.

South Korea's Kospi finished nearly flat, at 2,564.63. Australia's S&P/ASX 200 rose 0.3% to 8,226.30.

Chinese shares rallied after the government reported that exports jumped nearly 13% in October over a year earlier, the fastest pace in more than two years and far outpacing the 2.4% increase in September.

Hong Kong's Hang Seng gained 2% to 20,953.34. The Shanghai Composite index was up 2.6% at 3,470.66.

Trump has promised to slap blanket 60% tariffs on all Chinese imports, raising them still more if Beijing makes a move to invade the self-governing island of Taiwan.

Investors are adding to bets built earlier on what the higher tariffs, lower tax rates and lighter regulation that Trump favors will mean. Higher tariffs on imports from China would add to the burdens Beijing is facing as it struggles to revive slowing growth in the world's second-largest economy.

But the impact may be less drastic than feared, Zichun Huang of Capital Economics said in a report.

“We expect shipments to stay strong in the coming months –- any drag from potential Trump tariffs may not materialize until the second half of next year," Huang said.

Still, higher tariffs on imports from China, Mexico and other countries would raise the risk of trade wars and other disruptions to the global economy.

Trump's win raised expectations that Beijing may ramp up its spending and other stimulus to counter such trends. The Standing Committee of China's legislature is meeting this week and is expected to announce further measures by Friday.

Francis Lun, CEO of Geo Securities, said domestic issues were a greater concern than tariffs. "People want the government to spend some money to boost the economy, instead of looking outward,” he said.

On Wednesday, the U.S. stock market, Elon Musk’s Tesla, banks and bitcoin all stormed higher, as investors made bets on what Donald Trump’s return to the White House will mean for the economy and the world. Among the losers the market sees: the renewable-energy industry and potentially anyone worried about higher inflation.

The S&P 500 rallied 2.5% to 5,929.04 for its best day in nearly two years. The Dow Jones Industrial Average surged 3.6% to 43,729.93, while the Nasdaq composite jumped 3% to 18,983.47. All three indexes topped records they had set in recent weeks.

The impact of Trump's second term will likely depend on whether his fellow Republicans win control of Congress, and that’s not yet clear.

Investors see Trump’s policies potentially leading to stronger economic growth. That helps push prices down and yields up for Treasurys. Tax cuts under Trump could further swell the U.S. government’s deficit, increasing borrowing and forcing yields even higher. The yield on the 10-year Treasury jumped to 4.43% from 4.29% late Tuesday, which is a major move for the bond market. It’s up substantially from August, when it was below 4%.

Investors expect the incoming president's policies, particularly higher tariffs, to fan inflation and add costs to U.S. household bills. Sharp cutbacks in immigration could also leave businesses shorthanded, forcing companies to raise wages for workers faster and putting more upward pressure on prices.

Much of Wall Street’s run to records this year was built on expectations for cuts to interest rates by the Federal Reserve, as inflation has headed back down to its 2% target. Easier interest rates help boost the economy, but they can also give inflation more fuel.

The expectation is that the Fed will cut its main rate Thursday, but traders are already paring back forecasts for how many cuts it might make next year.

In other dealings early Thursday, the U.S. dollar weakened against the Japanese yen, slipping to 154.05 yen from 154.62 yen. The euro rose to $1.0757 from $1.0730.

U.S. benchmark crude oil shed 8 cents to $71.61 per barrel. Brent crude, the international standard, was up 2 cents at $74.94.

The price of bitcoin slipped to $74,789.38 after hitting an all-time high above $76,480 on Wednesday, according to CoinDesk. Trump has pledged to make the country “the crypto capital of the planet” and create a “strategic reserve” of bitcoin.

A man passes a video monitor on the side of the New York Stock Exchange in New York's Financial District on Tuesday, Nov. 5, 2024. (AP Photo/Peter Morgan)

A board above the trading floor of the New York Stock Exchange shows the closing number for the Dow Jones industrial average, Wednesday, Nov. 6, 2024. (AP Photo/Richard Drew)

People pass the New York Stock Exchange in New York's Financial District on Tuesday, Nov. 5, 2024. (AP Photo/Peter Morgan)

A TV camera screen shows the foreign exchange rate between U.S. dollar and South Korean won and the Korean Securities Dealers Automated Quotations (KOSDAQ) at a foreign exchange dealing room in Seoul, South Korea, Thursday, Nov. 7, 2024. (AP Photo/Lee Jin-man)

Members of media stand near the screens showing the Korea Composite Stock Price Index (KOSPI), left, the foreign exchange rate between U.S. dollar and South Korean won and the Korean Securities Dealers Automated Quotations (KOSDAQ) at a foreign exchange dealing room in Seoul, South Korea, Thursday, Nov. 7, 2024. (AP Photo/Lee Jin-man)

A currency trader talks on the phone at a foreign exchange dealing room in Seoul, South Korea, Thursday, Nov. 7, 2024. (AP Photo/Lee Jin-man)

A tv cameraman films the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at a foreign exchange dealing room in Seoul, South Korea, Thursday, Nov. 7, 2024. (AP Photo/Lee Jin-man)

A currency trader walks by the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at a foreign exchange dealing room in Seoul, South Korea, Thursday, Nov. 7, 2024. (AP Photo/Lee Jin-man)

A currency trader walks by the screens showing the foreign exchange rate between U.S. dollar and South Korean won at a foreign exchange dealing room in Seoul, South Korea, Thursday, Nov. 7, 2024. (AP Photo/Lee Jin-man)