Government Bond Yields All Close Lower

On the 18th, yields on government bonds all fell.

On that day, in the Seoul bond market, the yield on 3-year government bonds closed at 3.427% per annum, down 4.8 basis points (1bp = 0.01 percentage points) from the previous trading day.

The 10-year yield fell 7.0bp to 3.562% per annum. The 5-year and 2-year yields dropped 5.0bp and 5.6bp respectively, closing at 3.491% and 3.448% per annum. The 20-year yield declined 5.2bp to 3.474% per annum. The 30-year and 50-year yields fell 5.1bp and 4.9bp respectively, recording 3.376% and 3.354% per annum.

The bond market started strong, synchronizing with the decline in U.S. Treasury yields which closed lower the previous day. However, in the afternoon, the decline deepened, reversing recent gains.

Although the monetary authorities’ policy shift may be delayed more than the market expects, the 'direction' of interest rate cuts remains unchanged, leading to a growing perception that current yields represent a buying opportunity, which in turn attracted buying demand.