3-Year Government Bond Closes Lower... 10-Year and 20-Year Bonds Hit Yearly Highs

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[Asia Economy Reporter Hwang Yoon-joo] As the domestic 3-year government bond yield declined, the previously inverted yield curve between short-term and long-term bonds (3-year vs. 30-year) normalized. Except for the 3-year and 5-year government bonds, yields across all other maturities reached their highest levels of the year.

According to the financial market on the 12th, the 3-year government bond yield in the Seoul bond market fell by 0.081 percentage points from the previous session to 3.105%. It remained in the 3% range for two consecutive trading days following the previous day's 3.186%. The 5-year government bond yield also decreased by 0.033 percentage points to 3.270%.

However, long-term bonds (10 years and above) all rose. The 10-year government bond yield increased by 0.008 percentage points to 3.313%, marking the highest level in 7 years and 10 months since June 16, 2014 (3.315%).

The 20-year bond also rose by 0.008 percentage points to 3.263%, the highest since August 25, 2014 (3.291%). The 30-year bond closed up by 0.003 percentage points at 3.149%, the highest level since September 26, 2014 (3.164%).

As a result, the previously inverted yield curve between the 3-year and 30-year bonds normalized for the first time in history.

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