Short-Term Treasury Bond Yields Rise Ahead of FOMC Results

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] Ahead of the U.S. Federal Open Market Committee (FOMC) results, caution expanded, leading to a rise in short-term government bond yields on the 4th.

According to the Korea Financial Investment Association on the day, the 3-year government bond yield closed at 3.178%, up 3.9 basis points (1bp=0.01 percentage points) from the previous day. It matched the recent high recorded on April 11 (3.186%).

The 2-year yield rose 4.9bp to 2.953%, and the 5-year yield increased 4bp to 3.393% by the close.

The 10-year and 20-year yields rose 2.8bp and 2.6bp, respectively, closing at 3.434% and 3.38%. The 30-year and 50-year yields each increased by 0.6bp, finishing at 3.289% and 3.274%, respectively.

The rise in government bond yields is interpreted as a preemptive reflection of the FOMC results. The market has already priced in a 50bp hike and is also considering the possibility of a 75bp increase.

Meanwhile, U.S. Treasury yields also surged mainly in short-term maturities the previous day. The 2-year yield rose 5.3bp to 2.7844%, and the 10-year yield increased 0.4bp to 2.9849% by the close.

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