South Korea's stock market rallied sharply on Thursday, climbing close to 6% as investors wagered on increased shareholder returns from chip titans Samsung Electronics and SK Hynix, while concerns tied to the U.S. bond market eased. The local currency, the won, weakened against the U.S. dollar during the session.

The benchmark KOSPI index jumped 381.41 points, or 5.89%, to close at 6,852.58, after touching an intraday high of 6,904.55. The rebound recouped most of the prior session's losses, when the index tumbled nearly 6% amid a tech-led selloff. Sentiment got a major lift after SK Hynix unveiled plans to buy back 40 trillion won (approximately $28.7 billion) worth of its own shares.

Adding to the momentum, reports emerged that Samsung Electronics is set to unveil a 100 trillion won shareholder return program later this month. The news stoked expectations of a broader shift toward rewarding investors across the sector.

Around 10 a.m. local time, the Korea Exchange triggered its "Sidecar" mechanism, temporarily suspending program buying in KOSPI-listed stocks for five minutes. The circuit breaker activates when the KOSPI 200 futures index climbs 5% or more within a single minute.

Overnight, Wall Street's major indices finished higher as U.S. Treasury yields retreated after the Treasury Department announced plans to significantly expand its long-duration bond buyback program. The 30-year yield, which had earlier spiked to levels not seen since 2007, pulled back, while the benchmark 10-year yield also moved lower.