South Korea’s 10-year government bond yield fell to around 3.65% in early April, its lowest level in five weeks, after the United States, Iran, and Israel agreed to a two-week ceasefire to facilitate negotiations aimed at ending the war. US President Donald Trump postponed planned strikes on Iranian civilian infrastructure for two weeks, describing the arrangement as a “double-sided ceasefire,” under which Iran agreed to reopen the Strait of Hormuz and Israel paused its military operations.
The development eased market tensions, pushing oil prices lower and tempering some inflation concerns. At the same time, the Bank of Korea is widely expected to leave its key policy rate unchanged at 2.50% later this week, with analysts anticipating a cautious stance as the central bank evaluates the conflict’s implications for inflation and economic growth. South Korea, the world’s fourth-largest oil importer, obtains roughly 70% of its crude supplies from the Gulf region.
