National Treasury Bond Yields Rise Simultaneously Amid Middle East Tensions

Amid rising tensions in the Middle East following Iran's airstrike on Israel, government bond yields rose across the board on the 15th.

On that day in the Seoul bond market, the yield on 3-year government bonds closed at 3.440% per annum, up 3.7 basis points (1bp = 0.01 percentage points) from the previous trading day.

The 10-year bond yield increased by 2.3bp to 3.561% per annum. The 5-year and 2-year yields rose by 4.0bp and 2.2bp, closing at 3.494% and 3.467% per annum, respectively.

The 20-year bond yield rose 2.9bp to 3.483% per annum. The 30-year and 50-year yields increased by 3.1bp and 2.5bp, recording 3.390% and 3.368% per annum, respectively.

Foreign investors net bought 9,357 contracts of 3-year and 6,010 contracts of 10-year government bond futures, while securities firms net sold 12,612 contracts and 7,367 contracts, respectively.

The bond market on this day was influenced by concerns over escalation in the Middle East due to Iran's airstrike on Israel and fears of Israeli retaliation, which raised the risk of rising oil prices.

Typically, rising international oil prices exert upward pressure on bond yields, as slower-than-expected progress in price stabilization could further weaken central banks' ability to cut benchmark interest rates.

However, there is also analysis suggesting that the upward trend in international oil prices and bond yields may not persist in the long term.