SEOUL: South Korean bond prices jumped on Thursday after minutes of the last central bank meeting showed policymakers were deeply divided over whether to cut interest rates in April, and as expectations ran high that the European Central Bank will cut rates soon.
The yield on the 10-year treasury bonds tied a record low of 2.73 percent, falling below the policy rate currently at 2.75 percent.
Yields on five-year treasury bonds and on three-year treasury bonds both fell 5 basis points to record lows.
June futures on three-year treasury bonds jumped 0.19 basis points to 107.34 as investors bet on the chance that the Bank of Korea will cut rates on its next rate meeting on May 9.
"With economic indicators gloomy, bond prices will rally if the ECB cuts rates," said a local bank trader in Seoul.
The European Central Bank is expected to cut its main interest rate for the first time in 10 months later in the global day as inflation falls sharply.
Minutes from the Bank of Korea's April 11 rate meeting were released on Tuesday, showing that three of its board members had voted for a rate cut while Governor Kim Choong-soo had cast a gridlock-breaking vote to hold rates steady.
Kim had voted to keep the policy rate unchanged despite immense pressure from the government and lawmakers to cut rates to boost economic growth.
South Korean markets were closed for a public holiday on Wednesday, along with many other Asian markets. The minutes were released after trading ended on Tuesday.
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