▲ This rendered image depicts rate increases of South Korean government bonds. (Yonhap)

bond yields-January tally

Bond yields rise sharply in Jan. amid waning rate cut hopes

SEOUL, Feb. 12 (Yonhap) -- Yield rates on South Korean state bonds rose sharply in January from the previous month, as anticipation for a rate cut both in the United States and Korea waned, market data showed Thursday.

The yield on three-year Treasurys came to 3.138 percent as of the end of January, up 18.5 basis points from a month earlier, according to the data from the Korea Financial Investment Association (KOFIA).

The return on the benchmark 10-year government bonds shot up 22.2 basis points to 3.607 percent over the cited period.

The rate freeze decision from the Bank of Korea last month triggered bond yields to rise, with the pace of increase accelerating amid the Korean won's weakness and a rise in Japanese bond yields, KOFIA explained.

"Bond yields also rose on waning anticipation for a rate cut in the United States, after the Federal Reserve kept the U.S. base rate steady and the release of strong U.S. economic data," the association added.

Bond sales totaled 74.7 trillion won (US$51.9 billion) as of end-January, up 20.4 trillion won from the previous month. Foreigners held 342.3 trillion won worth of Korean bonds as of end-January.

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