Aju Press - Asia News Hub

Journalist

Kim Yeon-jae김연재

ReporterBank of Korea & Market, Macroeconomics

Kim Yeon-jae is a journalist at AJU Press (AJP's English platform),
covering macroeconomics, international finance, and geopolitics.
He closely tracks central bank monetary policies, global energy supply chains,
and the Korean defense industry. "Peering into the risks behind the euphoria."

Latest by Kim Yeon-jae

Korea business sentiment hits four-year high on chip boom SEOUL, Aug. 26 (AJP) — South Korean business sentiment rose to its highest level in nearly four years in August, buoyed by strong semiconductor exports and tourism demand even as domestic consumption and factory activity remained weak. The Composite Business Sentiment Index (CBSI) for all industries rose 1.1 points from July to 99.6, the highest reading since September 2022, according to the Bank of Korea (BOK) Wednesday. The outlook for September gained 3.1 points to 99.6. A reading above 100 means business sentiment is stronger than its long-term average, while a figure below 100 indicates weaker sentiment. Manufacturing CBSI gained 0.6 point to 103.8, while nonmanufacturing sentiment rose 1.5 points to 96.7. The September outlook increased to 102.5 for manufacturers and 97.6 for nonmanufacturers. Sentiment also improved among smaller manufacturers. CBSI for small and medium-sized manufacturers rose 2.2 points to 99.8. The index for large companies fell 1.6 points to 103.7. The gap between exporters and domestically focused businesses, however, remained wide as growth increasingly leaned on semiconductor shipments. Sentiment among export-oriented manufacturers climbed to 108.5 from 107.5. The index for domestically focused firms slipped to 99.4 from 100.0. Outside factories, the improvement was led by transportation and storage businesses, supported by higher maritime freight rates and stronger summer passenger and cargo demand. Information and communications firms also reported better conditions. Professional, scientific and technical services benefited from stronger orders for architecture, design and semiconductor-related engineering. Manufacturing sentiment remained firm, but stronger confidence was not matched by stronger factory activity. The manufacturing business-conditions BSI slipped one point to 81. Production fell to 92 from 93 and sales dropped to 93 from 96, while new orders were unchanged at 92. The gain in manufacturing CBSI was driven mainly by inventories and funding conditions, which contributed 0.6 point and 0.4 point, respectively. Business conditions and production each subtracted 0.2 point. Price-related indicators also eased in August. The BSI for manufacturers' raw-material purchase prices fell to 123 from 129, while the selling-price index declined to 102 from 105. Profitability improved to 81 from 79, and funding conditions rose to 82 from 81. Domestic demand remained a weak spot despite the broader improvement in sentiment. Among manufacturers, the share citing sluggish domestic demand as a major business difficulty rose 2.6 percentage points to 19.0 percent in August. For nonmanufacturers, weak domestic demand was the most frequently cited difficulty at 19.4 percent, up from 18.4 percent in July. The broader Economic Sentiment Index, which combines business and consumer confidence, rose 1.5 points to 99.4. Its cyclical component gained 0.4 point to 96.9. The mixed readings come a day before the BOK's Monetary Policy Board decides whether to follow July's 25-basis-point increase with another hike or keep the benchmark rate unchanged at 2.75 percent. Five of nine economists surveyed jointly by AJP and Aju Business Daily expect the central bank to hold. A Korea Financial Investment Association survey showed 79 percent of bond-market professionals also forecast no change. AJP Takeaways • South Korea's all-industry CBSI rose 1.1 points to 99.6 in August, its highest level since September 2022, while the September outlook climbed 3.1 points to 99.6. • Semiconductor exports, tourism and transportation helped lift South Korean business sentiment, with manufacturing CBSI reaching 103.8 and nonmanufacturing CBSI rising to 96.7. • Factory production and sales weakened despite improved corporate confidence, while sluggish domestic demand remained the biggest concern ahead of the Bank of Korea's Aug. 27 rate decision. 2026-08-26 07:25:37
Extreme-heat days nearly double the average this summer in Korea SEOUL, August 25 (AJP) -South Korea has endured nearly twice the usual number of heat-wave days so far this year, with record-breaking temperatures and unusually persistent tropical nights pointing to a summer stretching well into September. The nationwide average number of heat-wave days reached 20.1 from the start of the year through Monday, almost double the seasonal average of 10.4 days, according to the Korea Meteorological Administration (KMA) Tuesday. A heat-wave day is defined as one when the daily high reaches 33 degrees Celsius or above. The heat has been particularly intense in the southeastern part of the country. Busan, Ulsan and South Gyeongsang Province averaged 25.6 heat-wave days, followed by Daegu and North Gyeongsang Province with 24.7 days and North Jeolla Province with 22.6 days. The nationwide average daily high in August has reached 32.1 C, 1.9 degrees above the seasonal norm of 30.2 C. Yangsan in South Gyeongsang Province recorded 42.5 C on Aug. 2, the highest temperature measured in South Korea since modern weather observations began in 1904. Other southeastern cities also broke local records. Temperatures reached 41 C in Bukchangwon on Aug. 2 and in Miryang the following day, while Uiryeong climbed to 40.8 C on Aug. 3. Relief has been scarce even after sunset. South Korea recorded an average 16.4 tropical nights through Monday, the second-highest level on record after 16.8 days in 1994. It marks the country's highest tally in 32 years. The KMA defines a tropical night as one when the nighttime low remains at or above 25 C. The prolonged heat is unlikely to disappear with the end of August. The North Pacific high-pressure system covering the Korean Peninsula is strengthening, while the Tibetan high is developing again above it, creating what forecasters describe as a "double heat dome" that traps hot air over the region. Maximum apparent temperatures are expected to hover around 33 C through early September, extending the spell of late-summer heat and likely pushing this year's heat-wave and tropical-night counts still higher. South Korea has already experienced two consecutive years of unusually prolonged heat. The annual number of heat-wave days reached 30.1 in 2024 and 29.7 last year. Tropical nights totaled 24.5 days in 2024 and 16.4 days in 2025. AJP Takeaways South Korea recorded 20.1 heat-wave days through Aug. 24, 2026, nearly twice the seasonal average of 10.4 days. Yangsan reached a record 42.5 C on Aug. 2, while tropical nights climbed to 16.4 days, the second-highest tally on record. A strengthening North Pacific high and returning Tibetan high are forming a "double heat dome," threatening to extend extreme heat into September. 2026-08-25 17:56:51
Won retreats as long-end Korean bonds rally ahead of BOK SEOUL, August 25 (AJP) - The Korean won weakened Tuesday after seven straight gains, and long-dated government bonds rallied ahead of a policy decision by the Bank of Korea (BOK). The won closed daytime trading at 1,386.1 per dollar, weakening 3.7 won from Monday's 1,382.4. It was the currency's first decline in eight sessions. The won briefly strengthened below 1,380 early in the session before reversing. The dollar firmed, and foreign investors continued to sell Korean shares. The dollar index stood around 99.07 shortly before the Seoul close, compared with 99.00 a day earlier. Month-end dollar selling by exporters helped limit the won's decline. Korean government bonds strengthened, but the gains were concentrated at the long end of the yield curve. The three-year government bond yield fell 0.6 basis point to 3.830 percent, and the 10-year yield declined 1.5 basis points to 4.320 percent. The move was considerably larger in longer maturities. The 20-year yield dropped 4.5 basis points to 4.576 percent, while the 30-year yield fell by the same amount to 4.632 percent. The divergence flattened the yield curve, with policy-sensitive maturities showing little movement ahead of the BOK's Monetary Policy Board meeting on Thursday. A Korea Financial Investment Association (KOFIA) survey released Tuesday showed 79 percent of bond-market professionals expect the BOK to hold its Base Rate at 2.75 percent this week. Twenty percent forecast an increase. That marked a sharp reversal from KOFIA's survey ahead of the July meeting, when 66 percent expected an increase and 34 percent forecast a hold. The shift toward a hold produced little additional movement in shorter maturities Tuesday as investors awaited the actual policy decision and the BOK's updated economic forecasts. Longer-dated bonds also drew support from lower U.S. Treasury yields overnight. The 10- and 30-year U.S. yields declined in the previous session. The government also held a 20-year bond auction Tuesday, which cleared at a yield of 4.555 percent. The BOK will announce its policy decision Thursday, after raising the Base Rate by 25 basis points to 2.75 percent in July. 2026-08-25 17:36:01
KOFIA survey shows bond market shifts toward BOK hold SEOUL, August 25 (AJP) - Nearly eight in 10 bond-market professionals expect the Bank of Korea (BOK) to hold its policy rate Thursday, marking a sharp shift from the last poll ahead of the July rate-setting meeting, a survey showed Tuesday. The Korea Financial Investment Association (KOFIA) said 79 percent of 100 bond-market professionals it surveyed expected the BOK to keep its base Rate at 2.75 percent. Twenty percent forecast another increase. KOFIA said stronger economic growth, persistent inflation pressure and rising household debt continued to support the case for another rate hike. A firmer won and higher market interest rates, however, strengthened expectations for a pause. The latest results mark a reversal from the run-up to the BOK's July meeting, when 66 percent of respondents expected a rate increase and 34 percent forecast a hold. The BOK last month bumped up the benchmark rate 25 basis points to 2.75 percent in its first increase since January 2023. A separate survey by AJP and Aju Business Daily showed economists were considerably more divided over Thursday's decision. Five of nine economists forecast a hold, while four expected another 25-basis-point increase. The shift in bond-market expectations comes as the BOK weighs stronger economic growth and financial-stability risks against easing inflation pressure and a firmer won. South Korea's economy expanded 0.6 percent from the previous quarter in the second quarter. Consumer inflation slowed to 2.8 percent in July from 3.2 percent in June, reducing some of the urgency for another immediate rate increase. KOFIA's Base Rate Bond Market Survey Index (BMSI) jumped 47 points from the previous month to 81.0, reflecting the sharp increase in expectations for unchanged policy. The broader composite BMSI for September rose to 89.5 from 86.2, though it remained below the neutral level of 100. The interest-rate outlook BMSI climbed 15 points to 99.0. Sixty-nine percent of respondents expected market interest rates to remain broadly unchanged, up 13 percentage points from the previous month. The share expecting rates to rise fell 14 percentage points to 16 percent. The BOK will announce its rate decision Thursday alongside updated forecasts for economic growth and inflation. AJP Takeaways • Nearly 80 percent of bond-market professionals expect the BOK to hold its Base Rate at 2.75 percent Thursday, according to a KOFIA survey. • Bond-market expectations have reversed sharply since July, when two-thirds of respondents anticipated the rate increase that the BOK ultimately delivered. • The BOK must balance stronger growth and household-debt risks against easing inflation, a firmer won and higher market interest rates. 2026-08-25 15:58:17
Korea's new household loans hit three-year low in Q2 SEOUL, August 25 (AJP) - South Korean consumer borrowing fell to its lowest in more than three years in the second quarter amid tighter caps on mortgage lending. The average amount of new household loans dropped 3.6 percent in April-June period from the previous quarter to 34.14 million won ($24,687) per borrower, preliminary data from the Bank of Korea (BOK) showed Tuesday. The BOK attributed the decline in part to tighter loan management across the financial sector. The drop was concentrated among borrowers in their 30s and 40s, residents of the Seoul metropolitan area and mortgage borrowers. New mortgage borrowing fell 9.2 percent to 208.29 million won per borrower from 229.39 million won in the first quarter, the lowest since the fourth quarter of 2024, according to a separate BOK time-series comparison. The curb in new lending did not translate into lower outstanding debt. Average household loan balances per borrower rose 0.5 percent to 97.90 million won at the end of June. Average mortgage balances increased by 1.87 million won to 161.93 million won. The two measures capture different parts of household borrowing. New lending tracks loans issued during a quarter, while outstanding balances reflect accumulated loans that borrowers still owe. The BOK's borrower-level statistics are based on a sample from NICE Information Service's personal credit database covering 4.8 percent of borrowers. The data are designed to show differences in borrowing by age, region, lender and loan type. The second-quarter decline was particularly pronounced among borrowers in their 30s and 40s. Average new household borrowing among people in their 40s fell by 5.83 million won to 35.88 million won, while the figure for those in their 30s declined by 2.74 million won to 49.08 million won. The two age groups also led the decline in mortgages. Average new mortgage borrowing fell by 35.37 million won among borrowers in their 40s and by 26.32 million won among those in their 30s. Borrowers in their 20s bucked the trend. Their average new mortgage borrowing rose by 3.92 million won to 232.17 million won, and they accounted for 6.0 percent of new mortgage lending by value. The pullback was also concentrated in the Seoul metropolitan area. Average new household borrowing in Seoul, Incheon and Gyeonggi Province fell by 1.93 million won to 37.80 million won per borrower. Average new mortgage borrowing in the region declined by 43.97 million won to 230.59 million won. Lending trends diverged sharply between banks and nonbank institutions. Average new household borrowing through nonbanks fell by 14.39 million won to 27.91 million won, while borrowing through banks rose by 3.42 million won to 50.13 million won. Banks nevertheless remained the largest source of new borrowing by value, accounting for 58.3 percent of the total. Borrowers in their 30s accounted for 32.7 percent, while the Seoul metropolitan area represented 59.4 percent. The slowdown in new borrowing comes even as South Korea's overall household debt continues to rise. Separate BOK data released last week showed household credit increased by 25.9 trillion won to a record 2,019.8 trillion won at the end of June, exceeding 2,000 trillion won for the first time. The two statistics are not directly comparable. Household credit measures economy-wide loans and sales credit using reports from financial institutions, while the borrower-level statistics use a sample of individual credit records to track borrowing patterns. Second-quarter borrower-level figures are preliminary and will be finalized when the next quarterly data are released. AJP Takeaways: • South Korea's average new household borrowing per borrower fell 3.6 percent to 34.14 million won in the second quarter, the lowest since the first quarter of 2023. • New mortgage borrowing dropped 9.2 percent to 208.29 million won per borrower, led by declines among people in their 30s and 40s and in the Seoul metropolitan area. • New lending slowed even as South Korea's total household credit climbed to a record 2,019.8 trillion won at the end of June, according to the Bank of Korea. 2026-08-25 12:13:03
BOK allocates 20 billion won for flood-hit Gyeongnam SMEs SEOUL, August 25 (AJP) - The Bank of Korea on Tuesday allocated 20 billion won ($14.5 million) in emergency funding to support small and medium-sized businesses hit by torrential rain in South Gyeongsang Province. The funds will be drawn from reserves under the central bank's Bank Intermediated Lending Support Facility and assigned to its Gyeongnam branch, the BOK said. Eligible businesses must have received official certification of flood damage from a local government or administrative office. The program covers small business owners and self-employed workers as well as companies already receiving support under the BOK lending facility. The central bank will provide funding to financial institutions equivalent to 100 percent of eligible loans they extend to affected businesses. Eligible lending includes new loans with maturities of up to one year, as well as loan extensions and refinancing. The Bank Intermediated Lending Support Facility provides low-interest funds to banks based on their lending to SMEs and other eligible businesses. The BOK raised the facility's interest rate to 1.25 percent from 1.00 percent in July alongside its latest Base Rate increase. The central bank said it will review the extent of flood damage and borrowing demand among affected businesses and provide additional support if needed. 2026-08-25 10:18:01
Korea's food costs climb across home meals and dining out SEOUL, August 25 (AJP) - Korean households are facing renewed food-cost pressure across home cooking and dining out as extreme summer weather damages crops and fresh produce, adding to already elevated import costs. Korea Consumer Agency data released Tuesday showed ingredients for one home-cooked samgyeopsal (pork barbecue) meal cost 10,191 won ($7.38) in the first half, up 11.8 percent from a year earlier. “The first-half trend was moderate, but continuously rising without a single pause,” said Lim Sang-min, head of the consumer price team at the Korea Price Research Center, referring to restaurant prices. The average restaurant price of pork belly rose 2.7 percent to 17,745 won over the same period, narrowing the price gap between eating at home and dining out to 7,554 won from 8,173 won a year earlier. Pork belly itself, which accounts for most of the home meal cost, rose 13.6 percent to 7,866 won. Garlic climbed 10.2 percent and lettuce 6.3 percent. Ssamjang, a fermented dipping sauce, rose 19.8 percent. Restaurant staples have also continued to become more expensive. The average Seoul price of samgyetang, or ginseng chicken soup, rose to 18,192 won in July from 18,154 won a month earlier, Korea Consumer Agency data showed. Cold noodles increased to 12,692 won from 12,615 won, while a roll of gimbap rose for a second straight month to 3,869 won from 3,838 won. Gimbap had cost 3,723 won at the end of last year. The increases contrast with an easing in broader headline inflation. South Korea's consumer inflation slowed to 2.8 percent in July from 3.2 percent in June, according to the Ministry of Data and Statistics. Agricultural, livestock and fisheries prices rose just 0.9 percent from a year earlier as agricultural prices fell 2.2 percent. Livestock and fisheries prices, however, remained 4.4 percent and 3.9 percent higher, respectively. Restaurants are contending with higher food costs alongside wages, rent and utility bills, with some ingredients recording particularly steep increases. Fresh ginseng used in samgyetang averaged 38,750 won for 12 to 14 roots as of Aug. 21, up 56 percent from a year earlier. Restaurants selling cold noodles have also faced higher beef costs for broth. Summer heat has added pressure to fresh produce markets, although the increases have so far been most pronounced in wholesale prices. Earlier this month, wholesale cucumber prices were up 87.1 percent from a month earlier and spinach prices had jumped 86.5 percent as prolonged heat disrupted crop growth and harvesting. The government has said overall agricultural supplies remain manageable and has expanded discounts and supply measures aimed at limiting weather-related food price increases. Processed-food makers are also passing on accumulated costs. Nongshim raised shipment prices for major cup noodles by an average 6.0 percent and snacks by 5.5 percent from Aug. 1. Ottogi plans to lift prices of selected cup noodles by an average 6.7 percent and dumplings by 7.7 percent from Sept. 7, citing higher raw-material and packaging costs. The government earlier this month rolled out 30 billion won in seafood discounts of up to 50 percent through Aug. 23, alongside emergency fish releases and additional farm support ahead of Chuseok. AJP Takeaways: - Korea Consumer Agency data showed food costs rose both at home and at restaurants, with ingredients for a home-cooked samgyeopsal meal up 11.8 percent in the first half. - Korea Consumer Agency data showed Seoul prices for samgyetang, cold noodles and gimbap all increased in July despite headline inflation slowing to 2.8 percent. - Nongshim raised shipment prices for cup noodles and snacks in August, and Ottogi plans increases for cup noodles and dumplings from Sept. 7. 2026-08-25 10:16:29
Korea's Aug consumer confidence falls on volatile stocks and prices SEOUL, Aug. 25 (AJP) — South Korea's consumer confidence fell for the first time in four months in August as a stock-market correction and accumulated price pressures weighed on sentiment despite solid economic conditions, central bank data showed Tuesday. The Bank of Korea's Composite Consumer Sentiment Index (CCSI) fell 2.3 points from a month earlier to 104.5, snapping three straight months of gains since May. The index nevertheless remained above the benchmark of 100. A reading above 100 means consumer sentiment is more optimistic than the long-term average, while a reading below 100 indicates greater pessimism. All six components used to calculate the headline index fell from July, with consumers becoming less upbeat about both economic conditions ongoing and ahead. The index measuring perceptions of current economic conditions dropped 5 points to 79, while the outlook for the economy six months ahead fell 3 points to 89. The BOK attributed the decline to a sharp correction in the domestic stock market and the accumulated burden of higher prices, even as exports and investment continued to support the broader economy. The central bank said recent stock-market volatility had weighed on households' perceptions of economic conditions and savings, which include holdings of stocks and investment funds. Job prospects also weakened, with the employment outlook index falling 3 points to 86. The BOK pointed to continued declines in manufacturing and construction employment and persistent weakness among younger workers, particularly in industries with high exposure to artificial intelligence. The central bank said employment expectations fell across age groups but more sharply among people under 40. A recent BOK study found that much of the decline in youth employment over the past four years was concentrated in industries with high AI exposure. Households also grew less upbeat about their own finances. The index for current living conditions fell one point to 92, while expectations for living standards six months ahead declined one point to 97. Household income expectations slipped one point to 100, while the spending outlook edged down to 109. Housing expectations also cooled after rising sharply in recent months. The housing price outlook index fell 2 points to 125 from 127 in July as consumers took into account recent tax changes and government measures aimed at increasing housing supply. It was the first decline after four consecutive monthly gains through July. The index nevertheless remained well above 100, indicating that consumers expecting home prices to rise over the coming year still outnumbered those expecting a decline. The interest-rate outlook index slipped one point to 125, while the prospective price-level index was unchanged at 149. Consumers estimated inflation over the past year at 3.0 percent, while their median expectation for consumer-price inflation over the coming year remained at 2.7 percent for a second straight month. Inflation expectations three and five years ahead were also unchanged at 2.6 percent. The BOK said upward pressure from the prolonged stalemate in the Middle East conflict was offset by expectations for further interest-rate increases and the recent strengthening of the won against the U.S. dollar. Petroleum products remained the most frequently cited factor expected to push up consumer prices over the next year, selected by 50.2 percent of respondents. Agricultural, livestock and fishery products followed at 42.0 percent, amid extreme summer heat, while 33.3 percent cited public utility charges. The share citing agricultural, livestock and fishery products jumped 7.9 percentage points from July and the share pointing to rents rose 3.4 points, while the proportion citing petroleum products fell 7.3 points. The survey was conducted from Aug. 7 to 14 among 2,500 households in cities nationwide, with 2,244 responding. AJP Takeaways South Korea's consumer confidence fell 2.3 points to 104.5 in August, its first decline in four months, as a stock-market correction and accumulated inflation weighed on sentiment. Employment expectations weakened amid job losses in manufacturing and construction and persistent weakness among younger workers in industries highly exposed to AI. Housing price expectations eased after four months of gains, while one-year inflation expectations held steady at 2.7 percent. 2026-08-25 07:35:27
Won hits 11-month high, Korean bonds rally as stocks tumble SEOUL, August 24 (AJP) - The South Korean won strengthened to an 11-month high against the dollar on Monday. Government bonds also rallied as stocks tumbled and foreign investors bought bond futures. The won strengthened 4.1 won from the previous session to close daytime trading at 1,382.4 per dollar, compared with Friday's 1,386.5. The currency briefly strengthened to 1,376.5 during the session and extended its advance for a seventh straight trading day, the longest such streak since December 2013. Month-end dollar selling by exporters and offshore bets on further won appreciation coincided with the currency's gains. A steep equity selloff and heavy foreign stock outflows accompanied a partial pullback late in the session. The KOSPI tumbled 3.12 percent to 6,696.96 as Samsung Electronics plunged after its shareholder-return plan fell short of elevated market expectations. Foreign investors sold about 3.68 trillion won ($2.66 billion) of shares. Korean government bonds also strengthened. The three-year yield fell 1.3 basis points to 3.836 percent, the five-year declined 4.3 basis points to 4.068 percent and the 10-year dropped 4.1 basis points to 4.335 percent. U.S. Treasury yields and oil prices were higher early in the session, while foreign investors bought three- and 10-year bond futures as domestic bonds turned higher. An auction of a new five-year government bond produced accepted yields ranging from 4.095 percent to 4.135 percent, a split that coincided with a temporary pause in the rally. Bonds regained momentum as the equity selloff deepened in the afternoon, with longer maturities outperforming and the 10-year yield falling 2.8 basis points more than the policy-sensitive three-year yield. The move produced a bull-flattening of the yield curve ahead of the Bank of Korea's rate-setting meeting on Thursday. Markets are divided over whether the BOK will follow its July 25-basis-point increase with another hike. 2026-08-24 16:47:34
Korea's 5-year bond auction split raises demand concerns SEOUL, August 24 (AJP) - South Korea's new five-year government bond auction produced a wide range of accepted yields on Monday, signaling uneven investor pricing and trimming an earlier rally in the local bond market despite a strong headline bid ratio. The Ministry of Economy and Finance said it completed competitive auctions for both a new five-year Korea Treasury Bond and an existing five-year issue on Monday. The 1.5 trillion won ($1.09 billion) pre-issuance tranche of the new five-year bond drew 3.581 trillion won in bids, equivalent to a bid-to-cover ratio of 238.7 percent. Accepted yields ranged from 4.095 percent to 4.135 percent, with a weighted-average yield of 4.131 percent. The 4-basis-point gap between the lowest and highest accepted yields resulted in what local bond traders call a "split," reflecting a relatively wide divergence in the prices investors were willing to accept for the same security. A high bid-to-cover ratio by itself does not necessarily indicate strong underlying demand. The ratio measures the amount of bids submitted relative to the securities offered, but does not show how aggressively investors were willing to price those bids. Because bond prices move inversely to yields, investors bidding at lower yields are effectively willing to pay more for the debt, while those demanding higher yields are seeking a cheaper entry price. A split therefore suggests that while the auction attracted enough orders to cover the full issuance, investors were less aligned over what constituted an appropriate price. The result weighed on an earlier rally in Korean government bonds. Foreign buying of three- and 10-year bond futures had supported the market earlier in the morning, but gains lost some momentum after the five-year auction produced the split. At the morning session close, the five-year Korean government bond yield was down 1.4 basis points at 4.097 percent, while the 10-year yield fell 2.9 basis points to 4.347 percent. The three-year yield, by contrast, edged up 0.2 basis point to 3.856 percent, leaving moves across the curve mixed. The auction should not be read as a failed sale. The full amount was placed and bids exceeded the offered volume by more than two times. Still, the spread in accepted yields and the partial reversal in the market's earlier gains pointed to caution over end-investor demand and the appropriate valuation of medium-term government debt. The auction came three days before the Bank of Korea's monetary policy meeting on Thursday, with market expectations divided over whether policymakers will follow July's 25-basis-point rate increase with another hike. 2026-08-24 16:46:38