S. Korean 10-year bond yields near to break 2 pct mark for first time in 2016, register biggest daily jump

The South Korean 10-year bond yields hit highest in 8 months Friday after the Bank of Korea in its November monetary policy meeting kept its interest rate unchanged at record low level of 1.25 percent.

Also, Treasury prices also followed the global debt sell-off on expectations that U.S. President-elect Donald Trump's policies, such as fiscal expansion and protectionism on international trade, could support growth and inflation.

The 10-year bonds yield, which moves inversely to its price, rose 12 basis points to 1.948 percent, the yield on 20-year note jumped 8-1/2 basis points higher at 2.030 percent and short-term 3-year bonds yield climbed nearly 5 basis points to 1.515 percent.

The Korean bonds have been closely following developments in the U.S. debt market. The United States benchmark 10-year Treasury yield rose 8 basis points to the highest in 2016 of 2.138 percent.

The Bank of Korea left its base rate unchanged for a fifth straight month, as widely anticipated, amid an upswell of global uncertainty and a political scandal involving President Park Geun-hye that may mean trouble ahead for the economy.

Also, a shock win by Donald Trump in the U.S. presidential election earlier this week poses long-term risks the Bank of Korea (BOK), which it wanted to monitor carefully.

On Wednesday, the United States Republican candidate Donald Trump pinned his victory against Democrat opponent Hillary Clinton in the 2016 presidential election. Investors again revised the outlook for US interest rates after Donald Trump's victory, with the probability of a December rate hike by the Federal Reserve going from as low as 30 percent to as high as 80 percent.

Moreover, initial jobless claims in the United States fell during the week ended Nov 5, from almost a three-month high in the run-up to the country’s most impactful Presidential election concluded Nov 8, with the results being declared on the following day. Also, the fall in the number of people opting for unemployment benefits has strengthened the probability of a December interest rate hike by the Federal Reserve.

U.S.’s jobless claims fell by 11,000 to 254,000 in the week ended November 5, data released by the Labor Department report showed Thursday in Washington. The median forecast in a Bloomberg survey called for 260,000. Continuing claims rose, though the four-week average dropped to the lowest since 2000.

Meanwhile, The Korea Composite Stock Price Index (KOSPI) ended 0.91 percent lower at 1,984.43 points.