SINGAPORE: Foreign demand for Asia’s local currency bonds was patchy in August, showing signs of reversal in some markets as investors worried whether global monetary easing will continue and about broadly rising long-term yields if it does not.
Foreign investors further increased their holdings of markets such as Malaysia and other Southeast Asian countries, continuing to seek their high yields and promise of capital gains. Yet, the shifting in the global sentiment over the past few weeks has had an impact as concerns grew that top central banks may not have additional measures to support economies after a slew of unconventional steps like negative interest rates and money printing.