Korean currency, bond markets suffer choppy trading on surprise rate cut

From Yonhap:

The South Korean won closed nearly flat against the U.S. dollar Thursday after a choppy session and state bonds erased much of their earlier gains after the country's central bank unexpectedly slashed its policy rate to an all-time low.
The local currency closed at 1,126.40 per dollar, down 0.1 won from the previous session, snapping a three-day losing streak. The won dipped to as low as 1,136.40 won at one point immediately after the rate cut, but pared earlier losses as recent declines were excessive.

Yields on state bonds tumbled right after the rate reduction but erased earlier gains to close mixed as market players raised doubt over an additional rate cut down the road.

The yield on benchmark three-year Treasurys stood at a record low of 1.896 percent, down 1.1 basis points, while that on five-year Treasurys rose 1.2 basis points to 2.021 percent.

The Bank of Korea (BOK) unexpectedly lowered its base rate by a quarter percentage point to an all-time low of 1.75 percent in an apparent move to prevent Asia's fourth-largest economy from falling into deflation and lend support to sagging growth momentum.

The central bank lowered the rate by a total of 50 basis points in two rounds in 2014.

http://english.yonhapnews.co.kr/business/2015/03/12/90/0502000000AEN20150312003054320F.html