The 10-year Treasury bond yield closed on the 18th at a record high for the first time in 30 months. The rise reflected growing concerns that inflation will pick up because of the Middle East war. Expectations have strengthened that the Bank of Korea could raise the benchmark rate soon to stabilize prices.
According to the Korea Financial Investment Association, the 10-year Treasury bond yield closed at 4.239% on the day, marking the highest level since Nov. 1, 2023 (4.288%). The 20-year Treasury was 4.268%, the 30-year was 4.196%, and the 50-year was 4.04%, all hitting record highs for the first time in 30 to 31 months.
Korea is not alone in seeing Government Bonds yields rise. As international oil prices climb due to the Middle East war, inflation worries have grown worldwide. With forecasts that major countries' Central Bank will delay the timing of policy rate cuts, bonds are weakening. The lower a bond's price, the higher its yield. It means bond values are falling sharply.
The U.S. 10-year Treasury yield was 3.9% before the U.S.-Iran war, but since the 16th it has topped 4.6%. Japan's 10-year Government Bonds yield also surged to 2.69%, the highest since May 1997 in 29 years. The U.K. 30-year yield was at a record high for the first time in 28 years.