Foreign investors take a sunnier view of Korea now that the world's three major credit rating firms have all boosted its sovereign credit rating.

Korea's CDS premium, which is the interest rate for a credit default swap derivative that compensates for losses in case the country or company that issued bonds goes bankrupt, fell below Japan's for the first time since Japan was hit by a massive tsunami and earthquake in 2011.

The higher the premium, the higher the risk of default, so the issuer of the debt instrument has to pay a higher interest.

According to the Financial Supervisory Service, the CDS premium on five-year Korean sovereign bonds stood at 68.7 basis points (1 basis point=0.01 percentage point) as of Friday, the lowest since the global financial crisis in September 2008 and less than half the 171 basis points, which marked the peak in January of this year.

In contrast, Japan's CDS premium rose 2.7 basis points to 69.6 on the day.

This means international investors view Japan's sovereign bonds as riskier than Korean ones. China's CDS premium also surpassed Korea's since Sept. 5 to reach 74 basis points.