Korea Benchmark Bond Yield Tops 4% as Rate-Hike Bets Grow

South Korean bond yields rose to their highest level since November 2023 as an oil shock tied to the Iran conflict leads traders to expect bigger interest rate hikes.

The repricing is also gathering pace as an AI-driven memory-chip upcycle underpins growth, prompting major brokerages to revise their Bank of Korea policy outlooks. Goldman Sachs Group Inc. now forecasts two quarter-point hikes this year, versus none previously, while Hana Securities Co. sees one increase, up from zero. Citigroup Inc. now expects the BOK to add two more hikes next year from its previous call for just two this year. Nomura Holdings Inc. expects the BOK turning more hawkish in its dot plot while still expecting hold through next year.