Global financial market jitters deepen as government bond yields surge
Rising global government bond yields and the U.S. 10-year yield nearing 4.8% are rattling the market Take a quick look at the impact on the Korean stock and bond markets, and the background behind the surge in interest rates
As longterm government bond yields in major countries rise rapidly, global financial markets are being shaken. The yield on the U.S. 10year Treasury note closed at 4.799% on the 1st, approaching 4.8% for the first time since January last year.
The yield on the U.S. 30year Treasury note also rose to as high as 5.273%, remaining at a high level since 2006. Longterm government bond yields in Japan, the United Kingdom, Germany, and France also rose together, increasing the burden on each country's bond market.
The rise in government bond yields appears to have been driven by a combination of factors, including surging international oil prices, the possibility of additional interest rate hikes by major countries, and expectations of a large U.S. fiscal deficit and expanded Treasury issuance. In the market, there are also concerns that if the yield on the U.S. 10year note rises above 5%, funds could flow out of stocks and emerging market assets.
The domestic market was also affected. The KOSPI fell 3.99% on the 2nd, and the yield on 10year Korean Treasury bonds also rose, showing the global rate shock spreading into the South Korean financial market.