South Korean bonds end week on soft note after long rally following ongoing political crisis

The South Korean government bonds ended the week on a softer note after a long rally following ongoing political crisis as President Park Geun-hye announced a new Prime Minister and Finance Minister to tackle the political scandal.

The 10-year bonds yield, which moves inversely to its price, rose 1-1/2 basis points to 1.695 percent, the yield on 20-year note ended 2-1/2 basis points higher to 1.795 percent and short-term 3-year bonds yield climbed 1/2 basis point to 1.434 percent.

South Korean President Park announced the names of new Prime Minister and two other cabinet ministers to control the fallout of a scandal over the influence of a friend of hers in government affairs.

The President was under pressure after she apologized in media last week for taking help to prepare her speeches early in her term. South Korean media heavily reported that her friend, Choi Soon-sil, was thought to be involved in the country’s policy making despite having no recognised official role in the government.

On Tuesday, overall consumer prices in South Korea were up 1.3 percent on year in October, data released by Statistics Korea showed Tuesday. That exceeded forecasts for 1.1 percent, which would have been unchanged from the previous month following a downward revision from 1.2 percent. The Bank of Korea expects inflation to gradually accelerate on expected gains in oil prices to hit 1 percent this year, likely coming near its annual target of 2 percent next year.

Meanwhile, the Korea Composite Stock Price Index (KOSPI) ended 0.21 percent lower at 1,979.65 points.