SEOUL, Nov 17 (Reuters) - South Korean government bonds jumped on Tuesday on expectations that interest rates will stay steady in the near future before clearer signs of a solid economic recovery.

Bank of Korea senior deputy governor Kim Jae-chun reiterated government officials' concerns that a hasty rate hike might undermine the economic recovery momentum in Asia's fourth-largest economy.

The finance minister also stressed his cautious view on the economy, pointing to still fragile private sector and jobs market, while raising a need to frontload the government budget next year to sustain the nascent recovery pace.

"The debt market conditions are pretty favourable now - smaller new issues, strong buying interest by foreign investors, slowing pace of growth, and a slimmer chance of an early rate hike," said Kim Dong-whan, a fixed-income analyst at HI Investment & Securities.

The debt market will likely find more support as the government plans to buy back 1 trillion worth of treasury bonds ahead of their maturities on Wednesday and issue 1 trillion won in shorter-end notes in return for less liquid old-dated ones on Thursday.

The 5-year yield slipped 8 basis points to a one-month low of 4.82 percent while the 1-year treasury bond yield fell 5 basis points to a 3-month low of 3.18 percent.

Front-end treasury bond futures rallied as much as 35 ticks before ending 24 ticks higher at a more than 2-month high of 109.67 as foreign investors stayed net sellers for a 12th consecutive session, the longest buying streak since July.
close prev close
5-yr treasury bonds 4.82 pct 4.90 pct
3-yr treasury bonds 4.24 pct 4.29 pct
1-yr monetary stabilisation bonds 3.20 pct 3.24 pct
3-mth certificates of deposit 2.79 pct 2.79 pct
Average call rate 2.02 pct 1.94 pct
6-mth *KORIBOR 3.22 pct 3.23 pct

~ not quoted