Treasury bond yields closed higher across the board on the 23rd.
On this day in the Seoul bond market, the three-year Treasury bond yield finished trading at 3.617%. It was up 20.7 bp (1 bp = 0.01 percentage point) from the previous trading day, the highest since Nov. 28, 2023 (3.648%).
The move is seen as a reaction to the nomination of Shin Hyun-song, head of the currency and economic department at the Bank for International Settlements (BIS), as the next governor of the Bank of Korea (BOK). Expectations that the base rate will be raised if Shin is appointed as BOK governor lifted Treasury yields as well.
Shin is an academic categorized as a pragmatic hawk (favoring monetary tightening), known for predicting the 2008 global financial crisis. Because of this, there was also speculation that if Shin is appointed governor, the base rate will be raised at the May meeting of the Monetary Policy Board, the first meeting Shin would chair.
Kim Jin-uk, an economist at Citibank, said, "A rate-hike signal could come as early as the Monetary Policy Board meeting on May 28." He added, "The nomination of (Shin) as the next BOK governor candidate further supports our view that the BOK will raise the base rate by 0.25 percentage point (p) each in July and October this year."
That day, the one-year and two-year issues closed at 2.99% and 3.499%, respectively. They were up 9.6 bp and 19.9 bp from the previous trading day. The one-year marked the highest since September 2024 (2.991%), and the two-year the highest since May of the same year (3.507%).
The five-year rose 21.6 bp from the previous trading day to 3.837%, and the 10-year finished at 3.879%, up 14.3 bp over the same period. The 20-year, 30-year, and 50-year closed at 3.836%, 3.713%, and 3.592%, respectively. They were up 13.8 bp, 12.7 bp, and 12.4 bp, in that order, from the previous trading day. The 5-, 10-, 20-, 30-, and 50-year issues hit their highest levels in two years and four months since November 2023.