S.Korean bonds edge up as U.S. data, stocks eyed

SEOUL, Nov 5 - South Korean government bonds rose slightly on Thursday, driven by weaker equity markets, but trading was slow on caution ahead of the release of key U.S. employment data and its impact on U.S. bond prices.

The benchmark 5-year treasury bond yield fell 1 basis point to end at 4.97 percent. December treasury bond futures added 13 ticks to 108.80.

"Prices rose but traders would not take a strong position ahead of the U.S. data release and ahead of next week's interest rate meeting," said Kong Dong-rak, a fixed-income analyst at Taurus Investment & Securities.

The U.S. Labor Department is due to release weekly initial claims for jobless benefits later in the day and the reaction from U.S. bond investors could have a chain effect on South Korean markets on Friday.

South Korea's central bank is widely expected to hold interest rates steady at a record low 2.0 percent next week and in December, although investors have already priced in at least one rate increase by early next year.

close prev close 5-yr treasury bonds 4.97 pct 4.98 pct 3-yr treasury bonds 4.46 pct 4.47 pct 1-yr monetary stabilisation bonds 3.45 pct 3.48 pct 3-mth certificates of deposit 2.79 pct 2.79 pct Average call rate 2.00 pct 2.01 pct 6-mth *KORIBOR 3.25 pct 3.24 pct * Korea interbank offered rate