Global Anxiety Eases, Government Bond Yields Fall

The global anxiety surrounding the depreciation of the Chinese yuan pushed down government bond yields. On Wednesday, August 7, 2019, the yield on 5-year Indonesian Government Securities (SUN) fell 107 basis points (bps) to 7.027 from the previous day's close. Similarly, the 10-year yield dropped 118 bps to 7.536.

Previously, the 5-year SUN yield had risen 103 bps to 7.124 on Monday, August 5, 2019, and the 10-year yield strengthened by 107 bps to 7.676 from the previous weekend's close. Increased global uncertainty had prompted investors to demand higher yields due to rising market risk. However, throughout this year, bond yields have shown a downward trend, as seen in the graph below.

On the stock exchange, the Jakarta Composite Index (IHSG) rose 84.72 points (1.38%) to 6204.2. Similarly, the rupiah appreciated by 51.5 points (0.36%) to 14,225 per US dollar.