South Korean Government Bonds Face Pressure Amid AI Investment Boom and Rate Hike Expectations

South Korea's government bond market is experiencing significant pressure, with bonds losing 7.5% this year, making it the worst performer among 44 tracked markets. Yields have risen to their highest levels since 2023, driven by strong economic growth from AI investment and semiconductor demand. This robust economic activity is fueling expectations of potential interest rate increases by the central bank.