The central bank also issued 5.8 trillion won in short-dated monetary stabilisation bonds in the afternoon, adding to the supply load. Debt investors found little support from the Finance Ministry's repeated warning against a hasty exit strategy.
"The central bank may push for a rate hike before the incumbent governor retires in March but market players are increasingly pushing their bets on the first move into the second half of this year," said Yang Jin-mo, a fixed-income analyst at SK Securities. The benchmark five-year treasury bond yield rose 4 basis points to a one-week high of 4.84 percent while the March treasury bond futures contract fell 15 ticks to end at 109.40 as foreign investors reduced purchases.