South Korea's 30-year government bond yield climbed to a record high of 4.564 percent on Tuesday, surpassing the previous record of 4.52 percent set just a day earlier. This marks the highest level since the bond's issuance in September 2012. The sharp rise in ultra-long-term yields reflects growing inflation concerns driven by surging oil prices and expectations that the Bank of Korea (BOK) may continue raising interest rates.

The yield on the 30-year bond has surged 130.9 basis points from 3.255 percent at the beginning of the year, significantly outpacing the three-year yield increase of 93.2 basis points. Elevated energy prices and weaker demand from life insurers have intensified pressure on the debt market. When inflation remains high, investors demand higher yields to hold long-term bonds, causing yields to rise.

Kang Tae-soo, a special research fellow at the Federation of Korean Industries (FKI), warned that the sharp rise in long-term yields signals that a single rate hike may not suffice to contain inflation expectations. Expectations of another BOK rate increase in August, following its July hike, have further pushed yields higher. BOK Governor Shin Hyun-song emphasized that all upcoming policy meetings should be regarded as "live meetings," maintaining flexibility in monetary policy.

Hahm Joon-ho, a professor at Yonsei University and former BOK member, noted that long-term yields are influenced by both expected rate hikes and increased term premium due to tighter global financial conditions. Better-than-expected economic indicators, including GDP, have reinforced recovery expectations, impacting long-term bond yields. Similar upward pressure persists in the U.S., where the 30-year Treasury yield rose to 5.113 percent amid Middle East tensions and inflation warnings.