This section allows cross-market comparisons.
Weekly Debt Highlights
August 6, 2018

At its monetary policy meeting on 30–31 July, the Bank of Japan (BOJ) announced its plan to “strengthen the framework for continuous powerful monetary easing.” The BOJ will maintain its yield curve control program, keeping a target of around zero for the 10-year government bond, but it will allow more movement. It will also maintain its –0.1% target for the short-term policy rate, but will lower the base size of one of its reserves subject to the yield target. The BOJ lowered its gross domestic product growth forecast to 1.5% year-on-year (y-o-y) for fiscal year 2018 from an April projection of 1.6% y-o-y. The central bank stated that inflation remains positive but it will take more time to reach the 2.0% target than initially expected.

Consumer prices in Indonesia rose 3.2% y-o-y in July, after gaining 3.1% y-o-y in June, due largely to higher food prices. Consumer price inflation in the Republic of Korea remained unchanged in July from the 2 previous months at 1.5% y-o-y. Consumer price inflation in Thailand climbed to 1.5% y-o-y in July after slowing to 1.4% y-o-y in June. In Viet Nam, consumer prices rose 4.5% y-o-y in July, slowing from 4.7% y-o-y in June, due largely to higher food prices.

The Republic of Korea’s current account surplus narrowed to USD7.4 billion in June from USD8.7 billion in May. Exports from Malaysia grew 7.6% y-o-y in June to reach MYR78.7 billion. Malaysia posted a trade surplus in June amounting to MYR6.0 billion. Thailand’s merchandise exports grew 10.0% y-o-y in June to reach US21.8 billion. Merchandise imports registered slightly higher growth of 12.9% y-o-y in June compared with 12.7% y-o-y in May. Thailand’s trade surplus widened to USD2.9 billion in June. In Viet Nam, a trade deficit was recorded in July amounting to USD300 million, following a trade surplus valued at USD799 million in June. Exports climbed 10.3% y-o-y in July while imports rose 13.8% y-o-y.

Industrial production in Japan fell 2.1% month-on-month in June. Industrial production growth in Viet Nam rose to 14.3% y-o-y in July from 12.3% y-o-y in June.

The People’s Republic of China’s manufacturing Purchasing Managers Index (PMI) fell to 51.2 in July from 51.5 in June, while its nonmanufacturing PMI fell to 54.0 from 55.0 in the same period. Singapore’s PMI fell to 52.3 in July from 52.5 in June.

On 1 August, Bank Indonesia launched a new interbank overnight reference rate, the Indonesia Overnight Index Average, or IndONIA. This new rate replaces the overnight Jakarta Interbank Offered Rate, or JIBOR, which will still be used as reference pricing for longer tenors.

Last week, Bank OCBC NISP raised USD150 million from the sale of green bonds. The bonds carried a maturity of 5 years and were sold solely to the International Finance Corporation. The issuance marked the first green bond from an Indonesian banking institution.

Local currency government bond yields rose for all tenors in Singapore and Viet Nam, and were mostly up in Indonesia and the Republic of Korea last week. On the other hand, yields were mostly down in the People’s Republic of China, Hong Kong, China; and Malaysia. Yield movements were mixed in the Philippines and Thailand. The spread between the 2- and 10-year maturities widened for all emerging East Asian markets except for Malaysia, the Philippines, Singapore, and Viet Nam.