The relation between yield curve pattern and business cycle is always an interesting issue to economic scholars. Related researches in the past were mostly in adapted with fully-developed Western countries, yet this thesis focuses on the analyses of the yield and business cycle of Taiwan and South Korea, some less developed East Asian countries. Taiwan and South Korea have similar economic history and are both export-oriented. This thesis adopts linear regression and Probit model to discuss the relation of both countries’ business cycles to their respected term spreads of 10-year bond yields and the overnight rates. Multiple lagging terms are also used in defining term spreads in order to further justify the analyses. The result of the analyses show that the projecting of the term spread is adequate to forecast GDP growth rate and recession for either country; however, in forecasting of non-employment growth rate, diverging results are shown at different countries.