Asian Bonds Face Heaviest Foreign Outflows Since March 2020 Amid US Yield Spike
Asian bond markets suffer massive foreign outflows in September as soaring US Treasury yields and aggressive tightening drive regional divestments.
POLICY WIRE — New York, United States — Asian fixed-income markets experienced their heaviest foreign selling pressure in years during September, driven by a dramatic surge in United States Treasury yields and tightening monetary policy. Overseas investors offloaded a net $8.21 billion across regional sovereign debt in India, Indonesia, Malaysia, South Korea, and Thailand, marking the largest monthly capital withdrawal since March 2020.
South Korea bore the brunt of the regional selloff, with international investors shedding approximately $6.3 billion in domestic bonds throughout the month. This marked South Korea’s largest monthly net sales figure since divestments reached $7.25 billion in March.
The broader regional flight from safety was catalyzed by a sharp 53.5 basis point jump in the U.S. 10-year Treasury yield, which climbed to a 24-and-a-half-year high of 5.3645%. This spike in American borrowing costs significantly altered the yield landscape and diminished the relative attractiveness of emerging Asian debt assets.
Reporting by Policy-Wire (PW)