Key facts
- Asian bonds saw $8.21 billion in foreign selling in September.
- This is the largest monthly outflow since March 2020.
- US 10-year Treasury yield hit a 24-1/2-year high of 5.3645% in September.
Asian bonds experienced their heaviest foreign selling in over six years during September, with outflows totaling $8.21 billion across India, Indonesia, Malaysia, South Korea, and Thailand. This marked the largest monthly net withdrawal since March 2020. The outflows from bonds were accompanied by approximately $23.49 billion in outflows from regional equities. Khoon Goh, head of Asia research at ANZ, attributed the broad-based weakness to a cautious global risk environment and rising global bond yields amid elevated oil prices and the Federal Reserve's tightening cycle. The benchmark US 10-year Treasury yield surged 53.5 basis points in September, reaching a 24-1/2-year high of 5.3645% due to concerns that high oil prices could fuel inflation and bolster expectations of further rate hikes by major central banks. The U.S. Fed raised interest rates in the previous month and signaled potential for more increases.