Foreign investors sold a net $96 million, approximately 1.4 trillion won, of South Korean government bonds in July, marking the first month of net selling since the country was added to the World Government Bond Index (a major global sovereign debt benchmark) in April. Bank of Korea data showed foreign investors had been net buyers of $55 million in April, about 780 billion won, with purchases rising to $568 million in May, about 8 trillion won, before slowing to $165 million in June, about 2.3 trillion won, and then turning negative in July. Analysts cited the weaker relative appeal of Korean debt versus U.S. Treasuries, where yields are higher and currency-hedged carry trade incentives have narrowed. South Korea's 10-year government bond yield was 4.29% in the latest session, below the U.S. 10-year yield of 4.65%, while KOFR (South Korea's overnight financing benchmark) averaged 2.6% over 90 days versus 3.74% for three-month SOFR (the U.S. secured overnight funding benchmark). The arbitrage incentive for three-month Korean bond investment, measured as the interest-rate gap minus the swap rate, was negative every day from July 21 through August 13 after remaining positive from January through May. A Bank of Korea official warned that if current market conditions persist, short-term funds could leave more quickly, with the outcome hinging on conditions in the FX funding market (where investors borrow one currency and swap into another).