Asia bonds are stabilizing

Bond markets across the world had a tough start into 2022, with rising inflation, monetary policy tightening and the Russian invasion of Ukraine. Bond yields rose sharply during this period, but Nikko Asset Management in an outlook said that the volatility in bond markets is waning as the market has now priced in monetary policy tightening, with an opportunity in Asia bonds.

The investment management firm sees Asian bonds recovering in the coming months and said that Asian economies have mostly recovered to pre-pandemic levels as manufacturing and domestic activity are on a healthy recovery.

According to Nikko AM, inflation in Asia is not as bad as in the US and other western economies and central banks are under less pressure to hike interest rates. The asset manager is of the opinion that domestic subsidies by Asian governments have helped better manage the economy.

Read more at Emea.nikkoam.com.