On the 1st, government bond yields rose across the board ahead of the U.S. announcement on reciprocal tariffs.
In the Seoul bond market that day, the 3-year government bond yield closed at 2.581% per annum, up 1.2 basis points (1bp=0.01 percentage points) from the previous trading day.
The 10-year yield rose 1.6bp to 2.787% per annum. The 5-year and 2-year yields increased by 1.4bp and 0.6bp, closing at 2.659% and 2.654% per annum, respectively.
The 20-year yield rose 2.4bp to 2.695% per annum. The 30-year and 50-year yields increased by 2.4bp and 2.3bp, recording 2.598% and 2.463% per annum, respectively.
The bond market was on high alert for the U.S. government's scheduled announcement on reciprocal tariffs by country on the 2nd (local time).
Attention was also drawn to the U.S. Trade Representative (USTR) effectively demanding corrections in the '2025 National Trade Barrier Report,' including technology restrictions on Korea's large-scale arms imports and monthly age limits on U.S. beef imports.
However, the rise in government bond yields slowed after the Constitutional Court set the date for the impeachment trial verdict of President Yoon Seok-yeol.
Foreign investors continued their net buying of government bond futures for the second consecutive day following the previous day. They net purchased 7,761 contracts of 3-year government bond futures and 12,550 contracts of 10-year government bond futures.
Meanwhile, in the morning, the Ministry of Economy and Finance conducted a competitive bidding for an integrated issuance of 5.7 trillion won worth of 30-year government bonds (Government Bond 02625-5503), attracting bids totaling 14.594 trillion won, resulting in a bid-to-cover ratio of 256.0%.
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