Korean Treasury Yields Surge as U.S. Treasury Spike Pushes 3-Year Bond Above 4.1%

Highest Level Since November 2022

On September 28, yields on Korean Treasury bonds rose across the board, driven by the sharp increase in U.S. Treasury yields. Notably, the yield on the three-year Treasury bond, which is sensitive to monetary policy, surpassed 4.1%.

On this day in the Seoul bond market, the yield on the three-year Treasury bond closed at 4.119%, up 11.3 basis points (1bp = 0.01 percentage point) from the previous trading day. This is the highest level since November 8, 2022 (4.156%).

The yield on the 10-year bond rose by 14.7bp to 4.539%. The yield on the five-year bond climbed by 12.5bp to 4.345%, while the 30-year bond closed up 8.7bp at 4.650%.

The rise in Treasury bond yields on this day is attributed to the sharp increase in long-term U.S. Treasury yields during the Chuseok holiday period. Several factors contributed to the surge: persistently high oil prices, ongoing geopolitical tensions in the Middle East, and concerns over the U.S. fiscal deficit. In addition, the disappointment over Treasury buybacks and the lack of additional factors to cushion the shock of the rapid rise in interest rates further fueled the upward movement. The benchmark 10-year U.S. Treasury yield earlier surpassed 5.2%, marking the highest level since June 2007.

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