Bond yields eased, equities gained, and corporate lending expanded in South Korea in January, reported the Bank of Korea on Thursday, in a monthly bulletin.

South Korean "Treasury bond yields fell significantly (in January) owing primarily to concerns over a slowdown in the domestic economy," advised the Bank of Korea, although the central bank noted long-term yields rebounded somewhat on the outlook for less accommodation by the US Federal Reserve.

Still, major "short-term interest rates fell significantly as a result of

heightened expectations for a base rate cut" by the Bank of Korea, said the central bank.

The nation's stock markets rallied in January, as indicated by the KOSPI, a broad equities index. "The KOSPI rebounded significantly early in the year due to increased recognition that domestic stocks are undervalued," said the Bank of Korea.

South Korea's professional money managers enjoyed an inflow of funds in January. "Bond-type funds shifted to a large inflow. Stock-type funds and other funds also continued to increase," reported the Bank of Korea.

Bank lending also expanded in the month, noted the Bank of Korea.

However, bank lending to households cooled in January in South Korea, especially for home-purchase loans. Home "mortgage loans continued to show low growth due to a slowdown in housing transactions," said the Bank of Korea.

For all of 2025, the Bank of Korea recently projected a moderate economic expansion for the nation. South Korea's gross domestic product (GDP) should expand by between 1.6% and 1.7% in 2025, said the central bank, in its latest forecast made in late January.