World Economy

Korea Bond Yields Fall

Korea Bond Yields FallKorea Bond Yields Fall

South Korea’s bonds advanced this week, with the three-year yield dropping the most since 2013, as disappointing factory data added to speculation the central bank will cut interest rates further. Industrial output fell 2.7% in April from a year earlier, worse than the 0.5% decline estimated in a Bloomberg survey, official data showed Friday. Manufacturers’ business confidence slipped to a four-month low in June, according to a Bank of Korea statement. Uncertainties in South Korea’s growth path are rising, BOK Governor Lee Ju Yeol said Tuesday. The won posted its biggest weekly loss since March. “The resumption in expectations of further easing” drove yields lower, said Gao Qi, a Singapore-based strategist at Royal Bank of Scotland Group Plc. “There could be another rate cut in the coming meetings, which could be the last one this year.” The yield on sovereign notes due December 2017 decreased 13 basis points, or 0.13 percentage point, to a one-month low of 1.75 percent in Seoul, Korea Exchange prices show.