The South Korean won extended its gains, while bond futures declined as the central bank raised interest rates again on Thursday, following a hike in July. The USD/KRW pair dropped by as much as 0.5% to 1377.35 before paring some of the losses. Three-year South Korean government bond futures fell 18 ticks to 103.14, and the 10-year futures slipped 44 ticks to 105.50.

Market participants are now recalibrating positions in response to the Bank of Korea's tighter monetary policy stance, with the currency's strength reflecting growing investor confidence in the economy's resilience. The bond market's downturn, however, underscores concerns about higher borrowing costs dampening growth prospects, as traders adjust to the new rate environment.

Looking ahead, analysts expect further volatility in both the currency and fixed-income markets, as global factors and domestic data releases will likely influence the central bank's next policy moves. The immediate focus remains on the trajectory of the won and the stability of the bond market in the coming sessions.