SEOUL, Nov 5 (Reuters) - South Korean government bonds rose

slightly on Thursday, driven by weaker equity markets, but

trading was slow on caution ahead of the release of key U.S.

employment data and its impact on U.S. bond prices.

The benchmark 5-year treasury bond yield fell 1

basis point to end at 4.97 percent. December treasury bond

futures added 13 ticks to 108.80.

'Prices rose but traders would not take a strong position

ahead of the U.S. data release and ahead of next week's interest

rate meeting,' said Kong Dong-rak, a fixed-income analyst at

Taurus Investment & Securities.

The U.S. Labor Department is due to release weekly initial

claims for jobless benefits later in the day and the reaction

from U.S. bond investors could have a chain effect on South

Korean markets on Friday.

South Korea's central bank is widely expected to hold

interest rates steady at a record low 2.0 percent next week and

in December, although investors have already priced in at least

one rate increase by early next year.

close prev close

5-yr treasury bonds 4.97 pct 4.98 pct

3-yr treasury bonds 4.46 pct 4.47 pct

1-yr monetary stabilisation bonds 3.45 pct 3.48 pct

3-mth certificates of deposit 2.79 pct 2.79 pct

Average call rate 2.00 pct 2.01 pct

6-mth *KORIBOR 3.25 pct 3.24 pct

* Korea interbank offered rate

(Reporting by Yoo Choonsik; Editing by Jacqueline Wong)

((choonsik.yoo@thomsonreuters.com; +82 2 3704 5580; Reuters

Messaging: choonsik.yoo.reuters.com@reuters.net))

Keywords: MARKETS KOREA BONDS

(If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)

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