South Koreans went to the polls on Tuesday, in an election that may have already swayed under bombastic rhetoric from U.S. President Donald Trump.
The scales appeared to have tipped in
Ahn Cheol-soo, the candidate of the People's Party, and ultra-conservative Liberty Party of Korea's Hong Joon-
Polls will close at 8 p.m. Seoul time, with results expected as early as around 2 a.m. Seoul time. Financial markets in South Korea will be shut on Tuesday.
In the interview, Trump shocked the longstanding U.S. ally and trading partner with two unexpected announcements: He wants Seoul to pay for the THAAD missile defense system the U.S. is deploying there, and he wants to renegotiate the existing free trade agreement between the two countries.
Last month, even before Trump boosted
Moon is a liberal who has opposed THAAD and supports more engagement with the North, rather than relying on economic sanctions.
His opponent, centrist candidate Ahn Cheol-soo, supports a more traditional, tougher diplomatic path, including reviving the six-party talks.
Analysts pointed to the potential for the election to herald a shift in diplomatic relations.
"Moon's win could potentially result in cooling relations with the U.S. or even opening up conflicts," Ho Woei Chan, an economist at Singapore bank UOB, said in a note on Monday, citing the likelihood he would soften his country's policy on North Korea and revisit the THAAD deployment.
"Moon has also advocated for South Korean leadership on issues in the Korean peninsula and to reopen the Kaesong Industrial Complex in North Korea," Ho said.
Kim Byoung-Joo, adjunct professor at Hankuk University of Foreign Studies, told CNBC's "Squawk Box" on Tuesday that if the polls are correct and Moon wins a majority of votes, the proportion of votes will be closely watched.
"I think he was leading the polls [with] about 40 percent, and if he gets the votes over 40 percent or not will a very big question because it will really mean a lot about his mandates," Kim said.
"The number of votes will pretty much determine overall the initial course of his presidency," he said.
"If he gets more votes than 40 percent, it will probably mean that he will have a stronger mandate and he will have a greater confidence to push ahead with the policies that he has been talking about," Kim said. "But if he gets anything below 40 percent, he will have to reach out and embrace the center of the political curve, if you will, and he has to be more accommodating of the centralist desire about how flexible he will have to be."
Kim was less concerned about Moon's stance on North Korea, expecting that if he wins, the candidate will need to adjust his policy positions to be more in line with Washington's.
But Goldman Sachs noted that based on opinion
"Should Mr. Moon be elected to the presidency, the win would be the first by a progressive candidate since December 2002, and the first switch to a progressive presidency from a conservative one since December 1997," Goldman said in a note on Friday.
Early voting began on May 4, with local media reports indicating that as much as 26 percent of the electorate may have already cast a ballot.
The country's domestic politics were already in disarray after President Park Geun-
She was forced from office after months of large, peaceful protests.
-- Evelyn Cheng contributed to this article.