Foreign Investors Turn to Asia Bonds as US Yields Dip


Bond purchases by foreign investors in key Asian markets surged last month, sparked by a significant fall-off in US Treasury yields and a shift in Federal Reserve rate cuts forecasts.

Foreign investors made their largest monthly net purchase since May, buying a total of $6.36 billion in South Korean, Indian, Malaysian, Indonesian and Thai bonds last month, their biggest monthly net buying since May, according to data from regulatory authorities and bond market associations.

The surge in Asian bond purchases in November coincided with a sharp fall in US Treasury yields, following less hawkish remarks from Federal Reserve officials and cooler-than-expected October inflation data, as markets began to anticipate potential Fed rate cuts as early as March 2024.

Indian bonds attracted $1.78 billion in foreign capital, marking the highest inflow since August 2017, spurred by optimistic economic growth forecasts and the inclusion of local bonds in JP Morgan’s emerging market debt index next year.


Also on AF: New Huawei Laptop Fuels Talk of Sanctions-Beating 5nm Chip


South Korean bonds saw the first net purchase in four months, amounting to $1.72 billion, bolstered by improving exports that signalled economic resilience. 

South Korea’s exports exceeded expectations in November, with chip sales rising for the first time in 16 months amid a global demand uptick.

Exports from other regional economies, including China and Taiwan, also expanded last month, fuelling hopes for an economic rebound.

Indonesian, Malaysian, and Thai bonds also saw significant foreign inflows, attracting $1.5 billion, $1.16 billion and $202 million, respectively.

“Overall, portfolio flows into emerging Asia are set for a recovery on the back of improving fundamentals and an end to the US rate hike cycle,” Khoon Goh, head of Asia Research at ANZ.

“The technology-driven economies, South Korea and Taiwan, will benefit the most over the near term.”


  • Reuters with additional editing by Sean O’Meara


Read more:

China’s Debt-laden Provinces Raise $21bn to Save Small Banks

Rising US Yields Spur Major Outflow From Asian Bonds in Sept

China to Issue More Government Bonds to Tackle Debt Crisis

China’s New Bonds to Fight Climate Impacts, Lift Recovery



Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

Recent Posts

China’s GDP Growth Seen Slowing in the First Quarter

Analysts expect first quarter GDP will come in around 4.6% on Tuesday, which would be…

34 mins ago

Floods, Droughts, Earthquake, Big Freeze Cost China $3.3bn

China’s emergency management ministry said the country had also been hit by a drought, sandstorms…

21 hours ago

China Slams ‘Biased’ EU Over Electric Vehicle Imports Probe

A Chinese industry body chief said Brussels’ investigation was ‘tainted’ and stacked against his country’s…

23 hours ago

US Lawmakers’ Fury Over Huawei’s Intel AI Chip-Powered Laptop

Republicans have hit out at the Biden administration over continuing supplies of high-end American tech…

23 hours ago

Huawei Signals New High-End Smartphone After Mate 60 Success

Speculation has been growing for months about Huawei’s P70 model which is expected to be…

2 days ago

China Proposes New Trading, Listing Rules to Revive Market

China's Securities Regulatory Commission says it will bolster its supervision of company listings, delistings and…

2 days ago