This comment can be seen very often on Japanese message boards.
2 Answers
KY is short form of 空気読めない (Kuuki Yomenai)
KY means being unable to read the situation or being unable to pick up on the mood of a conversation.

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9It means like "clueless to the situation" or "doesn't know what's going on". – istrasci Jun 02 '11 at 02:11
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2It is also used in daily conversation and isn't limited to the internet or BBS – Mark Hosang Jun 02 '11 at 02:12
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9Recently, we don't use KY very much in Japan. – Kentaro Masa Jun 02 '11 at 02:25
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1Somehow KY fad has receded. When used to criticize somebody, it means 空気読め(Kuuki Yome!, read the situation will you!) instead. – syockit Jun 02 '11 at 02:37
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@Kentaro what is used to imply KY then? – Pacerier Jun 15 '11 at 04:06
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@Kentaro: I hear it, hum, a couple of times a month when I'm surrounded by 19-25 year-old kids… I guess they use it also when I'm not around. I don't know if that's a lot or not, compared to other expressions, though. – Axioplase Jul 03 '11 at 04:00
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I think it was fairly common to hear circa 2005-2012 but has since fallen out of more regular use these days. Those who were teenagers around that time probably still use it, though. It's in a bunch of media from then – psosuna Sep 07 '17 at 17:29
It means kuuki yomenai. A friend explained this concept as follows:
In Japanese culture, the social protocol calls for utmost attention to the right "atmosphere." Certain actions can only be considered appropriate when the "atmosphere" of the time and place allowed for them to be carried out. In Japanese lingo, it is "reading the air" (空気を読む)and for every person deemed to be lacking in such skill, the term "KY" ("cannot read the air, "Kuki Yomenai," 空気読めない) is ruthlessly (albeit sometimes jokingly) applied. The presence of these KY people is definitely a source of massive awkwardness and discomforting bluntness in any social gathering, whether work-related or otherwise.
Well, being careful to avoid KY-ness is obviously of high importance in certain work conditions. In the presence of one's superiors, or worse, external guests, doing anything KY, i.e. making overly argumentative comments against the others, aggressively doing something that should be reserved to the superiors, and so forth, as a new graduate, is bound to be highly humiliating and irritating for the superiors.
Sadly, one common example of KY is when leaving work. Unless you avoid KY, it will be considered rude for you to leave work, but of course this depends on the environment.

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