The Bank of Korea reported on September 28 that global government bond yields have risen during the Chuseok holiday, increasing uncertainty in international financial markets.
On the morning of the 28th, the Bank held a 'Market Situation Review Meeting' chaired by Deputy Governor Kwon Min-soo to assess the state of international financial markets during the holiday and its potential impact on domestic financial and foreign exchange markets.
Deputy Governor Kwon stated, "While the movements of major countries' stock prices and the U.S. dollar were relatively modest during the Chuseok holiday, global government bond yields have risen significantly due to changes in expectations regarding monetary policy, leading to heightened uncertainty in international financial markets."
During the holiday period, government bond yields in major countries, including the United States, increased, while stock prices saw slight declines. The U.S. dollar showed strength against other major currencies.
From September 23 to 25, U.S. Treasury yields rose by 10 basis points for the two-year note and 20 basis points for the ten-year note. Similarly, the ten-year government bond yields in Germany and the UK increased by 14 basis points and 13 basis points, respectively.
In contrast, movements in the domestic financial market were limited. In the offshore non-deliverable forward (NDF) market, the Korean won weakened slightly by 0.1% against the U.S. dollar, while Korea's credit default swap (CDS) premium remained low at 23.6 basis points as of September 25.
Deputy Governor Kwon emphasized, "While the fundamentals of the domestic economy remain strong, we must remain vigilant and closely monitor the evolving external risk factors, such as negotiations between the U.S. and Iran, concerns over fiscal soundness in major countries, and changes in expectations regarding the AI industry, as they could increase volatility in domestic financial and foreign exchange markets."
* This article has been translated by AI.
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