More leeway for Asian central banks to rate cuts as inflation returns to target
The Asian bond market is set for a boost in 2025, driven by favourable macroeconomic conditions, according to asset manager Schroders. In 2024, the market displayed resilience, with the JPMorgan Asia Credit Index returning 6.3% and the Markit iBoxx Asia Local Bond Index delivering 2.7% in USD terms as of Nov 27. The outperformance of USD-denominated bonds over local currency bonds was attributed to high USD yields and the dollar's strength.
Schroders has set out three key themes that will likely dominate the Asian bond markets in 2025:
