Government Bond Yields Fall Under "Big Cut" Pressure... 3-Year at 2.404% Per Annum

Long-Term Bonds Also Drop by More Than 1bp

On August 14, government bond yields fell across the board under pressure from expectations of a "big cut"-a 0.50 percentage point rate reduction. Bond yields and prices move inversely, so a decline in yields indicates a rise in prices.

Yeouido securities district lit up on the night of the 27th. Photo by Hyunmin Kim kimhyun81@

On this day in the Seoul bond market, the yield on three-year government bonds closed at 2.404% per annum, down 1.3 basis points (1bp = 0.01 percentage point) from the previous trading day. The yield on ten-year bonds fell by 2.2 basis points to 2.787% per annum. The five-year and two-year bonds each dropped by 1.6 basis points and 0.7 basis points, closing at 2.556% and 2.360% per annum, respectively.

The yield on twenty-year bonds fell by 1.7 basis points to 2.821% per annum. The thirty-year and fifty-year bonds declined by 1.2 basis points and 1.5 basis points, recording yields of 2.726% and 2.604% per annum, respectively.

Expectations for a "big cut" grew in the market after U.S. Treasury Secretary Scott Besant stated in an interview on August 13 (local time) that "a series of rate cuts could begin with a 50bp (1bp = 0.01 percentage point) rate reduction in September."