BOK Closely Monitors Market Volatility Amid Sharp Rise in US Treasury Yields

The Bank of Korea (BOK) has flagged a sharp rise in US Treasury yields during the Chuseok holiday, which may impact domestic financial and foreign exchange markets.

In a market review meeting held on September 28th, BOK Deputy Governor Kwon Min-soo stated that global government bond yields rose significantly due to shifting expectations for monetary policy.

The two-year US Treasury yield increased by 10 basis points between the 23rd and 25th of September, while the 10-year yield climbed by 20 basis points. German and British 10-year yields also saw a rise of 14 and 13 basis points respectively.

Moves in domestic financial markets were more contained, with the Korean won weakening by 0.1% against the US dollar in the offshore non-deliverable forward market. The credit default swap premium remained low at 23.6 basis points as of September 25th.