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Emerging East Asian Local Currency Bond Markets: A Regional Update

Issue: June 2025

Emerging East Asian financial markets remained resilient from March to May despite heightened global uncertainty and the prospect of a higher-for-longer monetary stance in the United States (US), according to the June 2025 issue of the Asia Bond Monitor. Financial conditions weakened in March-April over trade policy uncertainty before recovering in May, supported by improved sentiment on progress in trade negotiations. As a result, mixed patterns were observed in regional financial markets. Equity portfolio outflows and marginally widened risk premiums were recorded, while regional currencies strengthened against the US dollar and equity markets gained. Continued easing by central banks in emerging East Asia drove down regional bond yields. Amid heightened uncertainty in the first quarter of 2025, local currency bond issuance in emerging East Asia contracted 0.5% quarter-on-quarter to USD2.6 trillion, while sustainable bond issuance in ASEAN+3 markets contracted 24% quarter-on-quarter to USD47.7 billion.

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• Download the full report.
  
• Executive Summary
  
• Developments in Regional Financial Conditions
  
• Bond Market Developments in the First Quarter of 2025
  
• Recent Developments in ASEAN+3 Sustainable Bond Markets
  
• Policy and Regulatory Developments
  
• Unveiled by Deep Learning: The Environmental, Social, and Governance Emphasis of Leading Companies in East Asia and Southeast Asia
  
• Market Summaries