South Korean KOSPI Surges Over 5% on August 20 After U.S. Treasury Expands Long-Term Debt Buybacks

On August 20 the benchmark KOSPI index closed up 5.89% at 6,852.58 points, its strongest single-day gain in weeks. The rally was led by semiconductor giants: SK Hynix rose 12.73% to 1,691,000 won and Samsung Electronics advanced 9.49% to 271,000 won. Japan’s Nikkei 225 gained 1.36% to 66,216.79 points, while the MSCI Asia-Pacific equity gauge climbed 1% after a two-day decline.

Korea's KOSPI Plunges Over 6% as Chip Rout Triggers Trading Sidecar — BigGo Finance

The surge followed the U.S. Treasury Department’s announcement that it would at least double the size of its planned buybacks of longer-dated Treasury securities (10- to 30-year bonds). By purchasing more long-term debt, the Treasury aims to raise bond prices and push yields lower, easing pressure on equity markets. The move came amid concerns about inflation, rising government debt, and geopolitical tension in the Middle East, which had driven yields to multi-decade highs earlier in the week.

South Korea's Kospi Soars as US Treasury Buyback Plan Sparks Broad Asian Rally — BigGo Finance South Korea’s Kospi jumps 6% as Asian stocks rise after bond rally Asian shares gain, with South Korea's Kospi up 6%, after the US Treasury expands its debt buybacks South Korea Export Boom Deepens as Chip Sales Surge 199%, Fueling Rate Hike Bets — BigGo Finance Japan, South Korea Stocks Rebound Strongly as Kospi Rises Nearly 6%, SK Hynix Surges Over 12%, Samsung Gains Over 9%, Kioxia Rises Over 6%

• KOSPI: +5.89% to 6,852.58 points.

Japan, South Korea Stocks Rebound Strongly as Kospi Rises Nearly 6%, SK Hynix Surges Over 12%, Samsung Gains Over 9%, Kioxia Rises Over 6%

• SK Hynix: +12.73% to 1,691,000 won.

Korea's KOSPI Plunges Over 6% as Chip Rout Triggers Trading Sidecar — BigGo Finance

• Samsung Electronics: +9.49% to 271,000 won.

Korea's KOSPI Plunges Over 6% as Chip Rout Triggers Trading Sidecar — BigGo Finance

• Nikkei 225: +1.36% to 66,216.79 points.

Japan, South Korea Stocks Rebound Strongly as Kospi Rises Nearly 6%, SK Hynix Surges Over 12%, Samsung Gains Over 9%, Kioxia Rises Over 6%

• U.S. 10-year Treasury yield: fell to around 4.64% from 4.71%.

South Korea's Kospi Soars as US Treasury Buyback Plan Sparks Broad Asian Rally — BigGo Finance

• U.S. 30-year Treasury yield: slipped to 5.18% from 5.28%.

South Korea's Kospi Soars as US Treasury Buyback Plan Sparks Broad Asian Rally — BigGo Finance

The Treasury indicated that the expanded buyback program would target securities maturing in the 10- to 30-year range, with each operation sized at $4 billion or more beginning in September. Korean market officials activated a “sidecar” mechanism that temporarily halted program sell orders when KOSPI futures fell more than 5% below the prior close, helping to contain the earlier sell-off.

South Korea’s Kospi jumps 6% as Asian stocks rise after bond rally

• “The buyback suggests to me that the US Treasury is highly concerned about the long-term borrowing costs,” — Gerald Gan, chief investment officer at Reed Capital.

South Korea’s Kospi jumps 6% as Asian stocks rise after bond rally

• “While buybacks alone are unlikely to alter longer-term fundamentals, they do signal willingness by policymakers to lean against further yield increases,” — Lloyd Chan, foreign exchange strategist at MUFG Bank in Singapore.

South Korea’s Kospi jumps 6% as Asian stocks rise after bond rally

Korean policymakers are slated to meet later in August to decide whether to raise interest rates again, a decision that will hinge on whether the current rally proves durable amid evolving global bond market conditions.

Asian shares gain, with South Korea's Kospi up 6%, after the US Treasury expands its debt buybacks