South Korea's benchmark government bonds rose on Wednesday as foreign buying in treasury futures lifted market sentiment in thin trade and after a state research house lowered next year's growth forecast. Trading in benchmark bonds was limited while some sold short-term debt instruments to meet year-end cash needs, traders said.
The Korea Institute of Finance revised down its 2008 growth forecast for the country to 4.8 percent from 5.1 percent, citing higher interest rates and weakening global economic outlook. The yield on benchmark five-year treasury bond closed at 5.82 percent, down four basis points, and the three-year treasury yield also fell four basis points to 5.78 percent.
March treasury bond futures rose 17 ticks to 105.70. Traders expect little impact from economic data due on Friday, including November's industrial output and service sector output, as most dealers are done trading for the year. Seoul's benchmark stock index fell 0.66 percent after a rally that started before the Christmas lost steam.