10-Year Bond 3.137%, 20-Year Bond 3.115% Declining Trend
On the 16th, yields on government bonds fell across the board. This was influenced by dovish remarks from Jerome Powell, Chair of the U.S. Federal Reserve (Fed), and foreign investors' buying of government bond futures.
In the Seoul bond market that day, the yield on 3-year government bonds closed at 3.035% per annum, down 4.1 basis points (bp) from the previous trading day (1bp = 0.01 percentage points).
The 3-year government bond yield has recorded the lowest level of the year for three consecutive trading days since the 12th. The 10-year yield fell 4.0bp to 3.137% per annum. The 5-year and 2-year yields dropped 4.2bp and 3.5bp, closing at 3.061% and 3.102% per annum, respectively. The 20-year yield declined 3.3bp to 3.115% per annum. The 30-year and 50-year yields each fell 3.9bp, recording 3.030% and 2.986% per annum, respectively.
The government bond market showed strength throughout the day, influenced by Powell's remarks suggesting an imminent interest rate cut. The previous day, Powell stated during a discussion at the Economic Club in Washington D.C. that "waiting until inflation reaches 2% could mean waiting too long."
The year-on-year U.S. Consumer Price Index (CPI) inflation rate was 3.0% last month.
On the same day, foreign investors net purchased 4,000 contracts of 3-year government bond futures. This marked the 13th consecutive trading day of net buying since the 28th of last month. They also net purchased 3,576 contracts of 10-year government bond futures, continuing a net buying streak for nine consecutive trading days.
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