Government bond yields rise, influenced by President Lee Chang-yong's optimistic economic outlook

Government bond yields rose across the board on the 23rd. This appears to be largely influenced by Bank of Korea Governor Lee Chang-yong’s positive remarks on the economic recovery. Despite recent uncertainties related to U.S. tariffs, Governor Lee stated that domestic consumer sentiment and export growth momentum are contributing to the country’s economic expansion.

On that day, in the bond market, the yield on 3-year government bonds was 3.154% annually, up 1.1 basis points from the previous day. The 10-year yield also increased by 3.8 basis points, closing at 3.578%, with other maturities also recording gains. Notably, the yields on 30-year and 50-year bonds were 3.510% and 3.393%, respectively, each rising by 3.7 and 3.5 basis points.

Analysts believe that this rise in yields was significantly influenced by Governor Lee’s optimistic growth outlook expressed ahead of the Monetary Policy Committee meeting. According to him, despite uncertainties stemming from U.S. tariff policies, positive factors such as the improving semiconductor industry are driving economic growth.

On the other hand, market assessments suggest that external factors, such as the Supreme Court ruling on the legality of tariffs in the U.S., have had little impact. Researchers from NH Investment & Securities and Shinhan Investment Corp. also commented that while tariff issues have temporarily exerted some upward pressure on yields, Governor Lee’s remarks are the main driver behind the increase.

Going forward, markets are paying close attention to the Monetary Policy Committee meeting scheduled for the 26th, where the Bank of Korea is expected to revise upward its growth rate forecast for this year. This could be an important indicator influencing future benchmark interest rate policies.