South Korean Bonds Erase Gains on Bets BOK Will Hold Policy Rate
- Foreign investors turn net sellers of 10-year bond futures
- Won rebounds to close 0.2% higher; Kospi stock index falls
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South Korea’s sovereign bonds erased gains on bets the Bank of Korea will refrain from reducing its main interest rate from a record low.
The notes had advanced earlier as concern about weakening consumer demand in China, the nation’s biggest export market, prompted investors to favor the relative safety of debt. Foreigners sold more 10-year bond futures than they bought, prompting a retreat in similar-maturity debt. The BOK will keep its policy rate at 1.5 percent on Thursday, according to 15 of 17 economists surveyed by Bloomberg. Two see a cut to 1.25 percent.