Korea Bond Curve Flattens Amid Expectations for Higher-For-Longer Tightening

The yield curve in South Korea flattened further on Monday as front-end yields reached multi-year highs while longer maturities retreated.

The two-year Korean government bond yield ended at 3.932 percent, its highest level since November 1, 2023, and the three-year yield hit 4.025 percent.

This move reflects growing expectations that the Bank of Korea may need to keep rates higher for longer as the Federal Reserve tightens further and oil prices stay elevated.