Yields on Korean government bonds fell across the board amid concerns over an economic slowdown in the United States.
The KOSPI index is displayed on the status board at the Korea Exchange in Yeouido. Photo by Yonhap News
On October 22, in the Seoul bond market, the yield on three-year government bonds closed at 2.5272% per annum, down 0.01 percentage points from the previous trading day. Bond yields and prices move inversely, so a decline in yields indicates a rise in prices.
The yield on 10-year bonds dropped by 0.035 percentage points to 2.869% per annum. The five-year and two-year bonds ended at 2.687% and 2.521% per annum, down 0.024 percentage points and 0.02 percentage points, respectively.
The yield on 20-year bonds fell by 0.025 percentage points to 2.845% per annum, while the 30-year and 50-year bonds recorded 2.768% and 2.620% per annum, down 0.022 percentage points and 0.021 percentage points, respectively.
The bond market on this day was influenced by growing concerns over an economic slowdown, as the U.S. federal government shutdown reached its third week. Remarks by Jerome Powell, Chair of the Federal Reserve, suggesting that the Fed could end quantitative tightening (QT)-the sale of its bond holdings-within a few months, also impacted the market.
However, the decline in yields was limited, as the Monetary Policy Board meeting of the Bank of Korea is scheduled for October 23. Market participants expect the benchmark interest rate to remain unchanged, given the overheated real estate market and unstable exchange rates.
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