South Korean President Lee Jae Myung has repeatedly called for direct inter-Korean talks to ease tensions and replace the armistice with formal peace mechanisms, including potential sanctions relief tied to a nuclear freeze. North Korea has maintained its "two hostile states" policy, rejecting these overtures and de-escalation proposals as of late September 2026, which has heightened risks of localized clashes. Trader sentiment reflects North Korea's consistent refusal to engage despite South Korean diplomatic pushes and any parallel U.S. or multilateral channels. Upcoming developments such as scheduled military exercises, diplomatic summits, or shifts in sanctions policy could influence the likelihood of talks materializing within the market's timeframe.