South Korean government bonds extended gains on Friday, as investors ignored healthy growth in May exports and a slowdown in consumer inflation, making last minute purchases after the stock market eased from a record high.
Bond players have turned impassive towards negative factors in the market, analysts say, and gained during the day whenever domestic stocks slimmed gains during the session.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 0.90 percent to end at 1,716.24 points, hitting its fifth consecutive record. But investors made purchases after it slipped from a record high of 1745.39 at the end of the day.
The yield on the five-year treasury bond fell three basis points to 5.19 percent, while the three-year treasury bond yield was quoted two basis point lower at 5.15 percent.
"Indicators have confirmed bets that economic growth has turned to recovery, but fundamentals have lost their importance to traders these days as they are closely tracking local share movements," said Shin Dong-su, fixed-income analyst at NH Investment and Securities.
Commerce ministry data showed faster-than-expected annual growth of 11.9 percent in May against 17.1 percent in April, compared with an earlier forecast of 9.0 percent from a Reuters poll.
"Stronger-than-expected growth in May exports has confirmed expectations that the domestic economy is on its way to recovery, while analysts are also lifting their economy forecast for this year," Shin said.
Separate data from the National Statistical Office released May consumer inflation data of 2.3 percent annual growth, slowing from 2.5 percent in April. Investors also shrugged off revised first-quarter gross domestic product growth figures as they were the same as previous estimates.
Yields also dipped on Thursday, despite the record-breaking trend in the local stock market and a brighter outlook in the domestic economy as investors turned to bargain purchases.