Bond yields in the United States and major European countries have surged to their highest levels in decades, increasing tensions in South Korea's financial markets. If global high interest rates persist, they are expected to exert pressure on domestic market rates and exchange rates.
According to the International Financial Center, the yield on the benchmark 10-year U.S. Treasury bond rose by 3 basis points to 5.30% on October 5 (local time). During trading, it peaked at 5.347%, the highest level since April 2002. The 30-year bond also reached 5.702%, the highest since May 2002.
In Europe, bond yield pressures are also increasing. On October 1, the yield on the UK’s 30-year bond hit 6.029%, while France’s 10-year bond rose to 4.963%, marking the highest levels since 1998 and 2002, respectively.
In France, concerns over fiscal stability and political uncertainty have led to continued selling of government bonds. Similarly, in the UK, the potential for significant interest rate hikes by the Bank of England to stabilize prices has intensified selling pressure.
Japan's 10-year bond yield also climbed to 3% last month, the highest in 30 years, indicating that the selling trend is spreading globally. This is attributed to rising energy prices, inflationary pressures, increased investments in artificial intelligence and data centers, and expansive fiscal policies across various countries.
South Korea's financial markets are now facing greater upward pressure. The won-dollar exchange rate is fluctuating in the mid-1300s, supported by record current account surpluses, but the strong dollar and foreign capital flows could increase volatility in the won. The yield on South Korea's three-year government bonds has surpassed 4%, indicating rising interest rate levels.
* This article has been translated by AI.
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