Business · Markets · 3 hrs ago
Shinhan Says Further South Korean Bond Yield Falls May Be Limited
South Korean government bond yields fell sharply after markets reacted to the US midterm elections.
Investors moved toward bonds, which are seen as safer assets, as South Korean shares tumbled.
The Democratic Party’s strong result raised concerns that regulation could slow investment in US AI data centres and weaken demand for semiconductors.
That risk weighed heavily on South Korea, whose economy is sensitive to investment in AI equipment, and the Kospi and Kosdaq each fell more than 5%.
Shinhan Investment says further yield declines may be limited because yields have already fallen quickly and bond prices have risen.
It expects three-year government bond yields to be 3.55% to 3.75% and 10-year yields to be 3.75% to 3.95% by year-end.
Shinhan Investment Corp. said further falls in South Korean government bond yields may be limited after a sharp recent decline.
The firm linked the drop to increased demand for safe assets after South Korean stocks fell following the US midterm election.
Yields on three-year and 10-year government bonds fell 9.5 and 19.5 basis points, respectively, last week.
Shinhan forecast year-end yields of 3.55% to 3.75% for three-year bonds and 3.75% to 3.95% for 10-year bonds.
- Who
- Shinhan Investment Corp., citing researcher Kim Chan-hee.
- What
- The firm said further falls in South Korean government bond yields may be limited after a sharp recent decline.
- When
- The outlook was reported on November 6, 2026.
- Where
- South Korea.
- Why
- Concern that slower US investment in AI data centers could weaken semiconductor demand and South Korea’s economy increased demand for safe assets, while recent yield falls were already steep.
This story does not have two clearly opposing sides.
Concern about possible restrictions on AI data centers and slower semiconductor demand contributed to a fall in South Korean stocks and increased demand for bonds.
South Korean three-year and 10-year government bond yields fell by 9.5 and 19.5 basis points, respectively.
Shinhan Investment Corp. issued its outlook that further yield falls may be limited.
- Three-year yield fall last week
- 9.5 basis points
- 10-year yield fall last week
- 19.5 basis points
- 10-year yield fall over the past month
- About 48 basis points
- 30-year yield fall over the past month
- About 50 basis points
- Year-end three-year yield forecast
- 3.55%–3.75%
- Year-end 10-year yield forecast
- 3.75%–3.95%
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What people are saying
Concern about a slowdown in investment in artificial intelligence data centers has grown following the US midterm election, weakening domestic stocks, especially semiconductor shares, and strengthening demand for safe assets such as bonds.
In the short term, the related momentum is more likely to continue, but the sharp decline since October also means that concerns about the current level remain.