The bond yield in the domestic market rose in the month of June, while those in international markets continued to drop. In the beginning of the month, concern over the European debt trouble drew more buyers into the U.S. bond market. As the bond market turned strong, coupled with the weak performance of the stock market, the market yield continued to dip. The yield on U.S. 10-year treasury note closed at 3.17% on 6/22, off 11bps from the end of the previous month. Despite of bullish performance on the international scene, the yield in the domestic bond market managed to rise as Postal RemittanceandSavings Bank oversold government bonds in the month of May, plus the fact that the auction of government bonds in the month was below the previous level with only 1.55 bid-to-cover ratio and higher yield as compared to the previous average. Consequently, the yield on 10-year bond reached 1.49% at one time and closed at 1.45% on 6/22, up 7 bps from the end of May.

The 5-year, 10-year, and 20-year benchmark bond yield, and Taiwan government bond index closed around 0.99%, 1.38%, 1.93%, and 1,187.97 points at the end of May and around 1.03%, 1.40%, 1.86%, and 1,197.27 points at the end of June. The daily turnover in the bond market averaged NT$311.3 billion for the month of June. The daily average of outright trade amounted to NT$105 billion (34%) and that of RP/RS trade was NT$206.2 billion (66%). The market turnover decreased by 6.02% from May (the daily market turnover in the month of May averaged NT$331.2 billion; it amounted to NT$126.8 billion for outright trade and NT$204.4 billion for RP/RS trade).