Foreign investors stepped up their purchases in Asian bonds in June as a thaw in long-running Sino-U.S trade dispute and falling global interest rates bolstered the appetite for regional bonds. Last month, foreigners bought a net $12.36 billion of Asian bonds - their biggest net purchase in at least six years - data from regional banks and bond market associations in Malaysia, Thailand, Indonesia, South Korea and India showed.
South Korean bonds attracted over $5 billion worth of foreign money for a second consecutive month in June on rising expectations that its central bank will cut interest rates to boost its faltering economic growth. The South Korean central bank had raised its interest rates in November, pressured by aggressive rate hikes by the US Federal Reserve at the time.
High yielders such as India and Indonesian bonds also received solid inflows as the US Treasury yields last month dropped to their lowest in more than two-and-a-half years, spurring the borrow-low, invest-high carry trades. Thai and Malaysian bonds also witnessed over $1.5 billion worth of foreign inflows each, last month.
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