South Korean government bond prices fell on Wednesday, reversing Tuesday's strong rally, with investors discouraged by stable jobs market data and firmer shares. "The jobs market did not deteriorate further as feared, although the figures are still dismal," said Park Jong-youn, a fixed-income analyst at Woori investment & Securities.
Official data showed that the nation's jobless rate in April held steady at a seasonally adjusted 3.7 percent from March, the highest in 3-1/2 years, but job losses were reduced to 188,000 from 195,000 in March. The debt market initially gained support from the finance minister's pledge to keep a stimulative policy stance until there were clear signs of economic recovery, a day after the central bank left the rates steady at record-low 2.00 percent.
The central bank gave a big boost to debt investors on Tuesday, saying that it would not raise rates in a hurry. "The market will likely take a pause for a while until a new string of data comes out later in the month," Park said. The yield on the benchmark five-year treasury bonds rose 2 basis points to 4.53 percent while June treasury bond futures fell 6 ticks to 110.80.
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