South Korean benchmark government bond prices dipped on Friday, suffering a sixth straight session of losses tracking weaker US Treasury prices as data cooled expectations of an interest rate cut by the Federal Reserve.
Bonds prices have slid as wary investors ducked out of bond purchases over the past week, betting that the central bank will lift interest rates at its July 12 rate meeting. Recent signs of stronger fundamentals in the domestic economy have also encouraged investors to seek risk outside the bond market. The benchmark five-year treasury bond hit its highest in 4 years and 7 months after the government warned on Thursday of potential action to curb short-term borrowing.
By 0040 GMT the five-year treasury bond yield was up three basis points to 5.51 percent, the highest since 5.54 percent quoted in December 18, 2002. The three-year treasury bond yield was quoted four basis points higher at 5.40 percent.
US Treasury debt prices fell on Thursday after stronger-than-expected data on jobs and the services sector suggested to investors the Federal Reserve will not move to cut official interest rates any time soon.