[Asia Economy Reporter Hyungsoo Park] Treasury bond yields rose across the board.

On the 12th, in the Seoul bond market, the 3-year Treasury bond yield closed at 1.815% per annum, up 11.4bp (1bp=0.01 percentage point) from the previous trading day. This is the highest level since March 7, 2019, when it recorded 1.817% per annum.

The 10-year yield recorded 2.447% per annum, the highest since October 8, 2018, when it was 2.453% per annum. It rose 7.3bp compared to the previous trading day.

The 2-year, 5-year, 20-year, and 30-year yields also hit new annual highs. The 5-year and 2-year yields rose by 8.6bp and 11.8bp respectively, closing at 2.135% and 1.655% per annum.

Treasury bond yields generally declined immediately after the announcement of the base rate freeze in the morning but rebounded following remarks by Bank of Korea Governor Lee Ju-yeol. Governor Lee hinted at the possibility of an additional base rate hike within the year during a meeting.

Huh Jung-in, a researcher at KTB Investment & Securities, said, "The Bank of Korea's policy places greater emphasis on financial stability," adding, "In that regard, it is expected to implement an additional hike within the year to support sustainable growth."

However, he added, "It seems difficult for the base rate to exceed 1.5% as the market fears," and "Regarding inflation, from the second half of next year, it will slightly fall short of 2% reflecting the base effect."

This content was produced with the assistance of AI translation services.