Korean bond yields seen jumping on Mers stimulus

Seoul

SOUTH Korea's bond market is bracing for a jump in yields as the government plans new spending to protect the economy from a deadly virus that's damping confidence.

Issuance to fund the stimulus will add to a planned increase in sovereign sales and record supply of mortgage-backed debt. That will push the benchmark 10-year yield to 2.60 per cent this month, a level last seen in January, according to the median estimate of six primary dealers and two brokerages surveyed by Bloomberg on June 18 and June 19.

The yield rose seven basis points this week to 2.51 per cent as of 12:56 pm in Seoul after Finance Minister Choi …