Investor fervor for artificial intelligence that has driven South Korea¡¯s stock market to the top of global rankings is taking a toll on another market: government bonds.
The nation¡¯s government bonds have lost 7.5% this year in local-currency terms, the worst performance among 44 markets tracked by Bloomberg. The benchmark three-year yield rose to about 3.9% Friday, its highest level since 2023.
At the heart of the rout lies a growth story too strong for bonds to bear. A surge in AI investment and semiconductor demand has reignited South Korea¡¯s economy, lifted prices, and fueled bets the central bank will need to raise rates to rein in momentum.
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