Yields on Korea’s government bonds went up in Seoul on Thursday, as the ruling camp’s election defeat sapped market expectations for the Bank of Korea’s bond purchase program.

The yield for the three-year government bond rose 3.7 basis points to 1.52 percent, the highest this month, while the five-year note’s yield closed 4.2 basis points higher at 1.607 percent. The yield on 10-year debt rose 4.5 basis points to 1.844 percent. 


President Park Geun-hye’s Saenuri Party lost its majority status in Wednesday’s parliamentary election. As a campaign platform, the party had called on the central bank to take more steps toward quantitative easing to support the economy, asking it to buy bonds issued by the state-run Korea Development Bank and mortgage-backed securities issued by Korea Housing Finance Corp.

The BOK has kept the base rate unchanged at a record-low 1.5 percent for the past nine months. It is to review the borrowing costs on April 19.

By Lee Sun-young (milaya@heraldcorp.com)