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Emerging East Asian Local Currency Bond Markets: A Regional Update

Issue: March 2026

Emerging East Asian financial markets remained resilient between 3 November 2025 and 6 February 2026 despite rising global uncertainties, according to the Asia Bond Monitor March 2026. Strong fourth quarter (Q4) growth and renewed optimism around AI-related supply chains helped offset heightened geopolitical risks and AI valuation concerns. The region recorded equity gains, net portfolio inflows, and currency appreciation against the US dollar. Risk premiums diverged across markets, while bond yields broadly tracked movements in advanced economies. The region's local currency bond outstanding reached USD30.6 trillion by the end of 2025, with issuance moderating to USD2.9 trillion in Q4. ASEAN+3's sustainable bond outstanding totaled USD1.0 trillion by end-2025, supported by robust issuance of USD275.9 billion during the year. ASEAN+3 led all global regions in sustainable bond issuance in 2025.

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• Download the full report.
  
• Executive Summary
  
• Developments in Regional Financial Conditions
  
• Bond Market Developments in the Fourth Quarter of 2025
  
• Recent Developments in ASEAN+3 Sustainable Bond Markets
  
• Policy and Regulatory Developments
  
• Summary of “The Role of Artificial Intelligence in Finance: A Selective Review and Implications for Asia’s Financial Stability”
  
• Mobilizing Capital for Local Government Finance in Asia and the Pacific Through GSS+ Bond Markets
  
• Market Summaries