South Korea's finance minister, Lee Hyoung-il, said the country will immediately roll out market stabilization measures, including emergency buybacks of government bonds, should bond yields rise excessively.

Speaking at a cabinet meeting, he noted that local bond yields have continued to climb amid higher global interest rates.

His remarks came after the yield on South Korea's 3-year government bond rose to a nearly four-year high on Monday.

On Tuesday, that yield fell 5 basis points to 4.07%.

The 10-year yield dropped 8 basis points to 4.47%, after climbing about 15 basis points in the previous session.

As an energy importer, South Korea has seen inflation worries intensify after the Middle East war pushed oil prices higher, keeping government bonds under pressure for most of the year.

At the same time, U.S. Treasury yields, the global benchmark for government debt, have surged to multi-year highs, with traders betting the Federal Reserve may raise rates again this month after delivering its first hike since 2023.

South Korea last announced emergency bond buybacks in March, roughly a month after the Middle East war began, when a global bond selloff drove yields higher.

That 5 trillion won (about $3.7 billion) buyback program was carried out in two equal portions.