South Korea’s government bonds rose, pushing the 10-year yield down the most in a week, as a rebound in global debt markets buoyed demand for emerging-market assets.
Asian sovereign notes rallied, tracking a recovery in European and U.S. securities late last week. Bank of Korea Governor Lee Ju Yeol said Friday the monetary authority will stabilize the debt market if volatility increases due to external factors. The Finance Ministry sold 1.95 trillion won ($1.8 billion) of 10-year paper Monday.
“Traders are buying again as sentiment improved on the back of stabilized overseas bond markets,” said Shin Eol, a Seoul-based fixed-income analyst at Hyundai Securities Co.
The yield on the securities due September 2024 fell three basis points, or 0.03 percentage point, to 2.51 percent as of the 3 p.m. close in Seoul, Korea Exchange prices show. It dropped as much as seven basis points to 2.48 percent earlier, the biggest decline since May 8. The three-year yield lost two basis points to 1.89 percent.
The Finance Ministry sold 10-year bonds with two different maturities. It sold 1 trillion won of notes due September 2024 at 2.52 percent yield and 950 billion won of securities due June 2025 at 2.53 percent, according to the ministry’s website.
The BOK kept its policy rate at a record-low 1.75 percent on Friday, holding the rate for a second month. Governor Lee told reporters that the three reductions since August are having an impact on markets and the central bank needs to see their effect on the economy.
The government plans to announce measures to support exports before the end of June, Trade Minister Yoon Sang Jick said in a speech in Seoul on Monday. South Korea needs to prepare for structural changes such as an increase in local companies’ overseas production and a drop in China’s processing trade, he said.
The won was little changed at 1,085.51 a dollar after rallying 1.3 percent over Thursday and Friday, data compiled by Bloomberg show.