South Korean bonds close weak following global debt market; widening political crises limit yields growth

The South Korean government bonds closed lower Monday following weakness in the global debt market. Treasury prices rose after FBI Director James Coney said that the case against U.S. Democrat presidential candidate Hillary Clinton mishandling classified emails is closed again.

The 10-year bonds yield, which moves inversely to its price, rose 1-1/2 basis points to 1.707 percent, the yield on 20-year note ended 1-1/2 basis points higher to 1.806 percent and short-term 3-year bonds yield climbed 1/2 basis point to 1.434 percent.

South Korea’s political crises widened post the media release that the country’s prosecutors arrested two former presidential aides following an unconventional political distress that has surrounded the nation to a step closer to President Park Geun-hye.

South Korean President Park announced the names of new Prime Minister and two other cabinet ministers to control the fallout of a scandal over the influence of a friend of hers in government affairs.

The President was under pressure after she apologized in media last week for taking help to prepare her speeches early in her term. South Korean media heavily reported that her friend, Choi Soon-sil, was thought to be involved in the country’s policy-making despite having no recognized official role in the government.

Meanwhile, the Korea Composite Stock Price Index (KOSPI) ended 0.79 percent higher at 1,997.58 points.