Indonesian Government Bond Yields Rise, but Not as Fast as Other Asian Countries

Yields on government bonds in Asian countries have risen in line with increasing uncertainty in the global financial market.

The threat of high inflation has prompted several countries to raise their benchmark interest rates in recent months. One example is the United States (US) Federal Reserve (The Fed), which aggressively raised its benchmark interest rate by 75 basis points (bps) to a range of 1.5-1.75% in June 2022.

This increase in the US Federal Reserve's interest rate has attracted investors to place their investments in the US dollar. This condition has triggered a rise in global bond yields, including in the Asian region.

Based on World Government Bonds data, the yield on Indonesian government bonds with a 10-year tenor increased by 114.3 bps to 7.615% in the six months leading up to June 22, 2022.

Although it increased, its growth was not as rapid as the yield on government bonds in other Asian countries, as shown in the graph.

The yield on 10-year Hong Kong government bonds rose by 193.4 bps to 3.244% in the last six months. This increase was the highest among the other nine Asian government bonds.

Next, the yield on 10-year Philippine government bonds climbed 192.4 bps to 6.75% in the last six months. This was followed by a 158 bps increase in the yield on South Korean government bonds to 3.73%, and a 146.8 bps increase in the yield on Singaporean government bonds to 3.06%.

Similarly, the yield on 10-year Vietnamese government bonds rose by 135.9 bps to 3.421%. The yield on Thai government bonds increased by 108.2 bps to 2.97%, and the yield on Indian government bonds rose by 93.5 bps to 7.399%.

This was followed by a 76.4 bps increase in the yield on Malaysian government bonds to 4.33%, and a 17.6% increase in the yield on Japanese government bonds to 0.235%.

Details of 10-year government bond yields in Asian countries as of June 22, 2022:

* Indonesia: 7.615%
* India: 7.399%
* Philippines: 6.750%
* Malaysia: 4.330%
* South Korea: 3.730%
* Vietnam: 3.421%
* Hong Kong: 3.244%
* Singapore: 3.060%
* Thailand: 2.970%
* Japan: 0.235%

(Also read: Indonesian Government Bond Yields Among the Highest in Asia)