Seoul: Yield rates on South Korean state bonds rose sharply in January from the previous month, as anticipation for a rate cut both in the United States and Korea waned, market data showed Thursday. The yield on three-year Treasurys came to 3.138 percent as of the end of January, up 18.5 basis points from a month earlier, according to the data from the Korea Financial Investment Association (KOFIA).
According to Yonhap News Agency, the return on the benchmark 10-year government bonds increased by 22.2 basis points to reach 3.607 percent over the cited period. The Bank of Korea's decision to freeze rates last month led to a rise in bond yields, with the pace of increase accelerating due to the Korean won's weakness and a rise in Japanese bond yields, KOFIA explained.
"Bond yields also rose on waning anticipation for a rate cut in the United States, after the Federal Reserve kept the U.S. base rate steady and the release of strong U.S. economic data," the association added. Bond sales totaled 74.7 trillion won (US$51.9 billion) as of end-January, marking an increase of 20.4 trillion won from the previous month. Foreigners held 342.3 trillion won worth of Korean bonds as of end-January.