South Korea’s Kospi jumps 4% as Asian stocks rise after bond rally

Published Thu, Aug 20, 2026 · 09:36 AM

ASIAN stocks and bonds gained as US plans to buy back longer-dated Treasuries to curb borrowing costs buoyed sentiment. The US dollar steadied after sliding to a three-month low.

MSCI’s Asia Pacific index snapped a two-day losing streak to rise 1 per cent, boosted by a 4 per cent advance in South Korea’s Kospi.

Among the main market moves, the S&P 500 futures rose 0.2 per cent as at 9.51 am Tokyo time.

The Hang Seng futures rose 0.9 per cent, the Nikkei 225 futures (OSE) rose 1.1 per cent, Japan’s Topix rose 1 per cent and Australia’s S&P/ASX 200 rose 0.3 per cent.

Benchmark indices in Japan and Australia also climbed. SK Hynix shares jumped more than 8 per cent after the South Korean memory chip maker unveiled plans for a stock buyback.

Bonds in Japan, Australia and New Zealand all rose following gains in Treasuries on Wednesday (Aug 19). US sovereign debt rallied after the Treasury announced plans to boost buybacks of securities with maturities ranging from 10 to 30 years to rein in yields that had climbed to multi-decade highs.

The yield on the US 30-year bond held at 5.19 per cent in Asian trade after dropping nine basis points on Wednesday.

The benchmark 10-year yield stood at 4.64 per cent, holding its six-basis-point decline from the previous session.

Global bonds had been jolted in recent days as investors demanded greater compensation for inflation risks and rising government debt levels, while tensions in the Middle East added to price pressures.

The sell-off, which also weighed on stocks, was exacerbated by a wave of corporate borrowing to finance the artificial intelligence boom.

“There is no question that the administration has become very concerned about the bond market once again and thus they are giving it another injection of steroids,” said Matt Maley, chief market strategist at Miller Tabak + Co.

This is something that could “buoy risk assets over the near-term”, he said.

Bloomberg’s gauge of the US dollar was little changed in Asia, after sliding 0.8 per cent on Wednesday to the lowest level since May as Treasury yields declined.

In other corners of the market, gold slipped 0.2 per cent after climbing to its highest level since early June.

Bitcoin rose to around US$70,000 after US President Donald Trump pressed Congress to pass a key crypto bill as the White House hosted industry executives.

As sentiment improved, US equity-index futures advanced in Asian trading after the S&P 500 Index posted a modest gain Tuesday, even as chipmakers declined. Contracts for the Nasdaq 100 Index rose 0.4 per cent.

Meanwhile, Brent crude advanced for a fifth day to about US$91.85 a barrel.

That came after Trump said there would be an unprecedented economic warfare operation against Iran, after faulting the country for failing to take its chance to make a deal with him. 

Long-maturity government bond yields surged globally this week, with the US 30-year yield reaching its highest level since 2007.

A 10-year Treasury auction last week drew the highest financing cost for that maturity since 2007, while a 30-year sale a day later cleared at the highest yield since 2001.

While the Treasury did not indicate how the operations would be paid for, it typically relies on issuance of bills for its fluctuating funding needs.

If officials are in effect replacing longer-dated debt with short-term securities, the maneuver amounts to a version of the Federal Reserve’s “Operation Twist”.

“This administration needs a win, and maybe that comes in the form of artificially trying to keep long Treasury rates contained,” said Jack McIntyre, a portfolio manager at Brandywine Global Investment Management.

“They have to try something. Sentiment around the long-end globally is about as bearish as I have seen in a very long time.” BLOOMBERG