South Korean government bond prices trimmed some of their earlier heavy losses on Friday as strong quarterly economic data was countered by the authorities' vows to sustain accommodative policy. The debt market opened sharply lower on renewed fears of a rate hike after the central bank lifted its estimate of the third quarter gross domestic product (GDP) growth to a seasonally adjusted 3.2 percent, the fastest in 7-1/2 years.
But the investor jitters were tempered later as the finance ministry reaffirmed its determination to keep stimulus flowing so the economy could grow by its potential next year.
The benchmark 5-year treasury bond yield rose 5 basis points to 4.68 percent and the 3-year yield gained 4 basis points to 4.16 percent. One-year interest rate swaps edged higher. December treasury bond futures fell 13 ticks to end at over one-week low of 110.30 after tumbling as much as 23 ticks earlier.