1、Asia Bond Monitor November 2023This publication reviews recent developments in emerging East Asian local currency bond markets along with the outlook,risks,and policy options.It covers the 10 members of the Association of Southeast Asian Nations and the Peoples Republic of China;Hong Kong,China;and

2、the Republic of Korea.About the Asian Development BankADB is committed to achieving a prosperous,inclusive,resilient,and sustainable Asia and the Pacific,while sustaining its efforts to eradicate extreme poverty.Established in 1966,it is owned by 68 members 49 from the region.Its main instruments fo

3、r helping its developing member countries are policy dialogue,loans,equity investments,guarantees,grants,and technical assistance.ASIAN DEVELOPMENT BANK6 ADB Avenue,Mandaluyong City1550 Metro Manila,Philippineswww.adb.orgASIA BOND MONITORNOVEMBER 2023ASIAN DEVELOPMENT BANKThe Asia Bond Monitor(ABM)i

4、s part of the Asian BondMarkets Initiative,an ASEAN+3 initiative supported by the Asian Development Bank(ADB).This report is part of the implementation of a technical assistance project funded by the Investment Climate Facilitation Fund of the Government of Japan under the Regional Cooperation and I

5、ntegration Financing Partnership Facility.This edition of the ABM was prepared by a team from the Economic Research and Development Impact Department headed by Albert Park and supervised by Abdul Abiad,director of the Macroeconomics Research Division.The production of the ABM was led by Shu Tian and

6、 Donghyun Park,and supported by the AsianBondsOnline team.The AsianBondsOnline team members include Angelica Andrea Cruz,Debbie Gundaya,Jeremy Grace Ilustrisimo,Russ Jason Lo,Patrick Vincent Lubenia,Resi Olivares,and Roselyn Regalado.Mai Lin Villaruel provided operational support,Kevin Donahue provi

7、ded editorial assistance,Principe Nicdao did the typesetting and layout,and Carlo Monteverde and Erickson Mercado provided websitesupport.Contributions from Sayuri Shirai(advisor)at the AsianDevelopment Bank Institute,(professor)at the Keio University,and(former policy board member)at the Bank of Ja

8、pan;and Sei-Wan Kim(professor)at the Department of Economics of Ewha Womens University are gratefully acknowledged.How to reach us:Asian Development Bank Economic Research and Development Impact Department6 ADB Avenue,Mandaluyong City1550 Metro Manila,PhilippinesTel+63 2 8632 6545E-mail:asianbonds_f

9、eedbackadb.orgDownload the ABM athttp:/asianbondsonline.adb.org/documents/abm_nov_2023.pdf.The Asia Bond Monitor November 2023 was prepared by ADBs Economic Research and Development Impact Department and does not necessarily reflect the views of the ADB Board of Governors or the governments theyrepr

10、esent.ASIA BOND MONITORNOVEMBER 2023ASIAN DEVELOPMENT BANKCreative Commons Attribution 3.0 IGO license(CC BY 3.0 IGO)2023 Asian Development Bank6 ADB Avenue,Mandaluyong City,1550 Metro Manila,PhilippinesTel+63 2 8632 4444;Fax+63 2 8636 2444www.adb.orgSome rights reserved.Published in 2023.ISBN 978-9

11、2-9270-470-4(print);978-92-9270-471-1(electronic);978-92-9270-472-8(ebook)ISSN 2219-1518(print),2219-1526(electronic)Publication Stock No.TCS230534-2DOI:http:/dx.doi.org/10.22617/TCS230534-2The views expressed in this publication are those of the authors and do not necessarily reflect the views and

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17、for your intended use that does not fall within these terms,or for permission to use theADB logo.Corrigenda to ADB publications may be found at http:/www.adb.org/publications/corrigenda.Note:ADB recognizes“China”as the Peoples Republic of China;“Hong Kong”as Hong Kong,China;“Korea”as the Republic of

18、 Korea;“Vietnam”as Viet Nam;and“Russia”as the Russian Federation.Cover design by Erickson Mercado.ContentsEmerging East Asian Local CurrencyBond Markets:A Regional UpdateExecutive Summary .viDevelopments in Regional Financial Conditions .1Bond Market Developments in the Third Quarter of 2023.13Recen

19、t Developments in ASEAN+3 Sustainable Bond Markets.22Policy and Regulatory Developments.25How Does Inflation in Advanced Economies Affect Emerging Market Bond Yields?.28Market SummariesChina,Peoples Republic of.31Hong Kong,China.33Indonesia.35Korea,Republic of.37Malaysia.39Philippines.41Singapore.43

20、Thailand.45Viet Nam.47Emerging East Asian Local Currency Bond Markets:A Regional UpdateExecutive SummaryRecent Developments in Financial Conditions in Emerging East AsiaDuring the review period from 1 September to 10November,financial conditions weakened across emerging East Asia on expectations tha

21、t the UnitedStates(US)Federal Reserve would keep interest rates elevated for an extended period.1 This prospect drove both USdollar appreciation and capital outflows from emerging markets.To prevent inflationary pressure and safeguard financial stability,some regional central banks recently resumed

22、hiking policy rates,including Bank Indonesia,the Bangko Sentral ng Pilipinas,and the Bank of Thailand.Across emerging East Asian financial markets,widened risk premiums,a retreat in equity markets,and weakened currencies were recorded.Continued high interest rates in both advanced economies and regi

23、onal markets pushed up bond yields during the review period.With the Federal Reserve expected to keep interest rates high for a longer period,most regional currencies slightly weakened against the US dollar,posting an average depreciation of 1.0%(simple)and 0.4%(gross-domestic-product-weighted)durin

24、g the review period.Weak external demand and a moderating growth outlook in the Peoples Republic of China(PRC),combined with the hawkish monetary stance in the US,drove regional equity markets to fall by 4.9%(simple average)and 4.3%(market-weighted average),and for risk premiums,measured by credit d

25、efault swaps spreads,to widen by 3.3 basis points(simple average)and 1.4 basis points(gross-domestic-product-weighted average).Capital outflows from the regions equity markets amounted to USD17.1billion during the review period,while bond markets recorded outflows of USD5.9 billion inSeptember.The r

26、isk outlook for regional financial conditions is generally balanced.On the downside,the FederalReserves intention to hold interest rates elevated for a longer period will lead to lasting high borrowing costs in regional markets.This will challenge borrowers with significant leverage and a need for l

27、iquidity to refinance debt,including some property companies in the PRC and the Government of the Lao PeoplesDemocraticRepublic.In addition,higher borrowing costs will exacerbate the fiscal burden for governments using fiscal measures to support economic growth,even in economies with sound fundament

28、als,which will weaken both their fiscal balance and currency.On the upside,inflation across the region is expected to ease next year and over the medium term despite some transitionary pressure from the recent uptick in food and oil prices.The expected easing of inflation,combined with a weak extern

29、al environment and heightened financial risks from higher interest rates,may allow central banks to consider easing monetary conditions to support economic growth.Recent Developments in Local Currency Bond Markets in Emerging East Asia By the end of September,emerging East Asian local currency(LCY)b

30、onds outstanding reached USD23.5trillion on modest expansions of 2.5%quarter-on-quarter(q-o-q)and 8.2%year-on-year in the third quarter(Q3)of 2023,compared to 2.0%q-o-q and 7.9%year-on-year in the previous quarter.Growth in government bonds rose to 3.0%q-o-q in Q32023 from 2.4%q-o-q in the second qu

31、arter(Q2)of 2023,driven by increased issuance.Corporate bond market growth was broadly stable,rising 1.5%q-o-q in Q32023 versus 1.4%q-o-q in Q2 2023.Government bonds accounted for 62.4%of total LCY bonds outstanding at the end of September.Aggregate LCY bonds outstanding in member markets of the Ass

32、ociation of Southeast AsianNations(ASEAN)reached USD2.1trillion at the end of September,equivalent to 9.0%of the emerging East Asiantotal.1 Emerging East Asia is defined to include member states of the Association of Southeast Asian Nations(ASEAN)plus the Peoples Republic of China;Hong Kong,China;an

33、d theRepublic of Korea.2 ASEAN+3 is defined to include member states of the Association of Southeast Asian Nations(ASEAN)plus the Peoples Republic of China;Hong Kong,China;Japan;and theRepublicof Korea.Executive SummaryviiDuring Q3 2023,emerging East Asian LCY bond issuance totaled USD2.5 trillion o

34、n q-o-q growth of 8.6%,nearly doubling Q2 2023s growth of 4.6%q-o-q.Growth in government bond issuance surged 13.2%q-o-q to USD1.1trillion,up from only 2.3%q-o-q in Q2 2023,driven largely by economic stimulus measures in the PRC.Corporate bond issuance recorded USD0.9 trillion on moderated growth of

35、 5.0%q-o-q,compared with 12.5%q-o-q in the previous quarter.ASEAN markets total issuance reached USD0.5 trillion,comprising 19.7%of the regions total issuance in Q3 2023.The majority of LCY Treasury bonds outstanding in emerging East Asia at the end of September carried medium-to long-term tenors.In

36、 terms of bonds outstanding,Treasury bonds with maturities of over 5 years comprised 53.7%of the total,while the corresponding share was 55.6%in terms of Q3 2023 issuance.The relatively high share of medium-to long-term tenors among all outstanding Treasury bonds mitigated the impact of high interes

37、t rates on fiscal burdens.Treasury bonds in the region had a size-weighted average tenor of 8.7 years for outstanding bonds and 6.3years for Q3 2023 issuance.Meanwhile,domestic investors held 89.4%of the regions outstanding Treasurybonds at the end of September,contributing to Treasury bonds price r

38、esilience to portfolio outflows.Banks were the largest bond holders in the region,holding more than half of all outstanding Treasury bonds at the end ofSeptember.ASEAN+3 sustainable bonds outstanding reached USD734.1 billion at the end of September following robust issuance of USD57.3 billion in Q3

39、2023.2 ASEAN+3s sustainable bond market grew 5.2%q-o-q in Q3 2023,posting the fastest q-o-q growth and the largest quarterly issuance total among major regional sustainable bond markets globally.ASEAN+3 is the second-largest regional sustainable bond market in the world,accounting for 18.9%of total

40、global sustainable bonds,after the European Union(EU-20),which accounts for 37.1%.ASEAN+3s sustainable bond issuance during Q32023 comprised 36.3%of total global sustainable bondissuance.ASEAN+3s sustainable bond market remained small,accounting for only 2.0%of its general bond market.Thisis much sm

41、aller than the corresponding share of 6.7%in the EU-20 market.ASEAN+3 sustainable bond issuance is dominated by LCY financing,with 69.5%of Q3 2023 issuance in domestic currencies.However,this also was below the EU-20s LCY issuance share of 85.8%in Q3 2023.ASEAN+3 sustainable bond issuance in Q32023

42、was concentrated in shorter tenors,with 68.1%of issuances carrying maturities of 5 years or less,compared to the corresponding share of 34.9%in the EU-20.Following Singapores 50-year SGD2.8 billion green bond issuance in August,ASEAN+3s size-weighted average issuance tenor rose to 7.2 years in Q3 20

43、23,from 4.8 years in Q2 2023,which was roughly on par with 7.6years in the EU-20.Developments in Regional Financial ConditionsFinancial conditions in emerging East Asian markets weakened from 1 September to 10 November,largely driven by investor expectations that the United States(US)Federal Reserve

44、 would keep interest rates higher for longer than earlier anticipated.1 Inflation in some regional markets also picked up amid elevated food and oil prices during the review period.As a result,emerging East Asian economies experienced a retreat in equity markets,widened risk premiums,currency deprec

45、iations against the US dollar,as well as net foreign portfolio outflows.Regional bond yields rose in nearly all markets during the review period,mirroring the upward movement of yields in major advanced economies(Table A).Risks to regional financial conditions remained balanced.The downside risk of

46、an extended period of high interest rates posing a threat to financial stability could be offset by factors that support an ending of tight monetary stances,including the expected easing of inflation,headwinds to the economic outlook,and heightened financial risks due to high interest rates.1 Emergi

47、ng East Asia is defined to include member states of the Association of Southeast Asian Nations(ASEAN)plus the Peoples Republic of China;Hong Kong,China;and theRepublic of Korea.Table A:Changes in Financial Conditions in Major Advanced Economies and Select Emerging East Asian Markets from 1 September

48、 2023 to 10 November 20232-Year Government Bond Yield(bps)10-Year Government Bond Yield(bps)5-Year Credit Default Swap Spread(bps)Equity Index(%)FX Rate (%)Major Advanced EconomiesEuro Area8 17(2.0)(0.9)Japan9 22 10(0.1)(3.5)United States18 47(2.2)Select Emerging East Asian MarketsChina,Peoples Rep.

49、of22 2 0.7(3.0)(0.3)Hong Kong,China37 25(6.4)0.5 Indonesia51 45 5(2.4)(2.9)Korea,Rep.of17 18 4(6.0)0.1 Malaysia4 5 2(1.2)(1.3)Philippines30 35 3(0.3)1.1 Singapore(4)(4)(3.9)(0.6)Thailand25 30 3(11.0)(2.5)Viet Nam6 5 5(10.0)(1.0)()=negative,=not available,bps=basis points,FX=foreign exchange.Note:A p

50、ositive(negative)value for the FX rate indicates the appreciation(depreciation)of the local currency against the United States dollar.Source:AsianBondsOnline calculations based on Bloomberg LP data.The rise in long-term bond yields in major advanced economies,especially the US,outpaced the increase

51、in short-term bond yields during the review period,steepening yield curves.Increases in short-term government bond yields in the US and euro area were driven by their respective central banks decision to hold interest rates higher for longer to address persistent elevated inflation.The rapid rise in

52、 long-term bond yields,especially in the US,reflected an increased bond supply and a heavy fiscal burden of rising debt levels and higher interest rates.This was noted by Fitch Ratings when it downgraded the sovereign credit rating of the US from AAA to AA+on 1 August.In its decision,Fitch Ratings c

53、ited an“expected fiscal deterioration in the next 3 years”as well as a high and still growing debt burden as factors for the downgrade.Moodys also revised its UScredit rating outlook from stable to negative in November,citing a wider budget deficit.At the end of July,the USTreasury raised its borrow

54、ing target in the third quarter to USD1trillion,which was USD274billion 2Asia Bond Monitor November 2023higher than its initial estimate in May,due to a forecast of lower receipts and higher outlays.2 The increased supply of USTreasuries needed to finance the deficit pushed up long-term bond yields.

55、Persistent inflation and a solid job market lent support to the Federal Reserve to maintain higher interest rates for an extended period.The Federal Reserve left the federal funds target rate unchanged at its 1920 September and 12 November Federal Open Market Committee(FOMC)meetings.In its September

56、 FOMC meeting,the Federal Reserve raised interest rate forecasts for 2024 and 2025 to 5.1%and 3.9%,respectively,from projections in June of 4.6%and 3.4%.This suggests that the Federal Reserve will keep higher interest rates for longer than previously expected.Subsequently,in its November FOMCstateme

57、nt,the Federal Reserve noted that inflation remains elevated and the labor market has slowed but is still strong.The US inflation rate fell to 3.2%year-on-year(y-o-y)in October over falling energy prices from 3.7%y-o-y in both September and August,but was still above the 2.0%inflation target.Brent c

58、rude oil prices had risen to USD95.4per barrel on 19 September,the highest so far this year,due to supply concerns before falling to USD86.2 per barrel on 5October as fears of reduced demand from a slowing global economy took hold.Theprice bounced back to USD94.1 per barrel on 20 October amid the cu

59、rrent conflict in the MiddleEast but had since declined to USD82.6 per barrel by 10November(FigureA).Excluding food and energy,however,core inflation in the US continued to decline,falling to 4.0%y-o-y in October from 4.1%y-o-y in September and 4.3%y-o-y in August.Nonfarm payrolls declined to 150,00

60、0 in October from 297,000 in September.Therecent economic performance remained sound in the US,with the annualized quarter-on-quarter gross domestic product(GDP)growth rate climbing to 4.9%in the third quarter(Q3)from 2.1%in the second quarter(Q2)of2023.The recent rise in Treasury bond yields,especi

61、ally long-term bond yields,may suggest there will be no further rate hikes this year.The Federal Reserve noted in its November FOMC meeting that financial conditions have tightened for households and businesses.During the FOMC press conference,Federal Reserve Chair Jerome Powell mentioned that the F

62、ederal Reserve will be assessing if there is a need for further rate hikes,fueling speculation that the Federal Reserve is done hiking rates.The CME FedWatch Tool reflected this expectation,with its probability of no rate hike at the December FOMC meeting increasing from 68.9%as of 31October to 95.2

63、%on 3 November and its probability of 25 basis points(bps)rate hike declining from 28.8%to 4.8%during the same period.Nevertheless,uncertainty remained as Federal Reserve Chair Jerome Powell noted that the FOMC is committed to bring inflation down to its target rate during the International Monetary

64、 Fund annual research conference on 9November.FederalReserve Governor Christopher Waller on 7November indicated that the recent US GDP figure was a“blowout”and needs observing.Federal Reserve Governor MichelleBowman,on 7 November in a speech to the OhioBankers League,said that the recent USGDP perfo

65、rmance suggests the need for a higher federal funds rate.DallasFederalReserve President Lorrie Logan also said that US economic performance has been strong and noted that inflation is still elevated.As a result,the probability of a rate hike at the December FOMC meeting rose to 9.1%as of 10November.

66、In the euro area,a weakening economic performance and declining inflation increased the possibility of a halt in rate hikes.The euro area also experienced a rise in both long-and short-term bond yields during the review period as the European Central Bank(ECB)persisted in tightening its monetary pol

67、icy.The ECB raised its three main interest rates by 25 bps each on 14 September and hinted that current interest rates were now sufficient to Figure A:Brent Crude Spot PriceUSD=United States dollar.Note:Data coverage is from 1 January 2023 to 10 November 2023.Source:Based on Bloomberg LP data.100908

68、07060USD per barrelJan2023FebMarAprMayJunJulAugSepOctNov2 US Department of the Treasury.2023.“Treasury Announces Marketable Borrowing Estimates.”Press Release.31 July.Developments in Regional Financial Conditions 3bring down inflation in the medium-term,suggesting that it will halt its rate hikes.Su

69、bsequently,on 26 October,the ECB left policy rates unchanged at their current levels.The ECB observed weakened demand and restrictive financial conditions that could contribute to easing inflationary pressures.Inflation in the euro area eased from 5.2%y-o-y in August to 4.3%y-o-y in September and fu

70、rther to 2.9%y-o-y in October.Recent data confirmed the weakening economic performance in the euro area.GDP growth fell to 0.1%y-o-y in Q3 2023 from 0.5%y-o-y in Q2 2023 and 1.1%y-o-y in the first quarter of 2023.The ECB revised downward its GDP growth forecasts to 0.7%in 2023 and 1.0%for 2024 in Se

71、ptember from forecasts of 0.9%and 1.5%,respectively,in June.Meanwhile,amid rising energy prices,the ECB revised upward its inflation projections to 5.6%for 2023 and 3.2%for 2024 in September from June projections of 5.4%and 3.0%,respectively.During its 31 October monetary policy meeting,the Bankof J

72、apan(BOJ)announced that its previous 1.0%ceiling on the 10-year government bond yield would now be treated more as a reference or guide,and it ceased purchases of 10-year Japan Government Bonds at a fixed yield of 1.0%.The Box presents a brief overview of the BOJs unconventional monetary policy easi

73、ng measures in the past decade and discusses their impact on the development of domestic bond markets and exchange rates.The BOJ also released updated forecasts in October from its previous ones in June.GDP forecasts were revised to an annualized 2.0%for 2023 and 1.0%for 2024 in October from 1.3%and

74、 1.2%,respectively,in June.Meanwhile,inflation forecasts were adjusted to 2.8%y-o-y in 2023 and 2024,and 1.7%y-o-y in 2025,from June projections of 2.5%y-o-y,1.9%y-o-y,and 1.6%y-o-y,respectively.InQ3 2023,Japans GDP shrank an annualized 2.1%after a robust annual growth of 4.5%in Q2 2023.Inflation ha

75、s been relatively stable in recent months but remained above the BOJs 2.0%target,with inflation for August at 3.2%y-o-y,September at 3.0%y-o-y,and October at 3.3%y-o-y.The recent uptick in food and oil prices and expectations of higher interest rate for a longer period in advanced economies increase

76、d the possibility of continued tight monetary stances among regional central banks to address inflationary pressure and safeguard financial stability.While a majority of central banks in emerging East Asia kept their monetary policy rates on hold during the review period,Bank Indonesia raised rates

77、unexpectedly by 25 bps on 19 October to support rupiah stability and avert further capital outflows from its financial market(TableB).The Bank of Thailand raised its policy rate by 25 bps on 27 September,following an earlier rate hike in August,as a preemptive move to contain inflationary pressure f

78、rom supply-side factors,particularly the governments proposed economic stimulus measures.Likewise,the BangkoSentral ng Pilipinas raised its policy rate by 25bps in an off-cycle move on 26October.Amid rising food and oil prices,some markets in the region saw an uptick in inflation in September and Oc

79、tober(FigureB).While some central banks in the region have reacted or are reacting to the rise in inflation,the BankofKorea has indicated that it may also raise its policy rate but largely to safeguard financial stability.Higher bond yields and expectations of an extended period of higher interest r

80、ates in major advanced markets drove up bond yields in most emerging East Asian markets,where both the 2-year and 10-year yields rose between 1 September and 10 November.The rise in yields in the region were capped somewhat toward the end of the review period following the FOMCs 1-2November meeting

81、over the possibility that the Federal Reserve may no longer raise policy rates.The exception was in Singapore which saw a decline in its 2-year and 10-year yields during the review period,as headline inflation was stable and its core inflation continued to decline.Due to expectations that the Federa

82、l Reserve will maintain higher rates for an extended period,the USdollar slightly strengthened against most emerging East Asian currencies.The average depreciation for all regional currencies was 1.0%(simple)and 0.4%(GDP-weighted)between 1 September and 10 November(FigureC).The Laotian kip suffered

83、the largest decline(5.1%)on high external debt levels and inflation.The Indonesian rupiah fell by 2.9%,driven by capital outflows from its financial market during the review period.The Thai baht also weakened by 2.5%amid slow GDP growth of 1.5%y-o-y in Q3 2023,versus 1.8%y-o-y in the previous quarte

84、r,and a rising fiscal deficit.In contrast,the Philippine peso appreciated marginally due to an influx of remittances ahead of the coming holiday celebrations.The Cambodian riel also strengthened(0.9%),buoyed by central bank intervention to support financial stability.4Asia Bond Monitor November 2023

85、Box:The Bank of Japans Unprecedented Decade-Long Monetary Easing and Recent Challenges Caused by the Ultra-Weak YenHaruhiko Kurodas decade-long governorship at the Bank of Japan(BOJ)from March 2013 to early April 2023 marked an important milestone in Japans unconventional monetary easing policy,whic

86、h was initiated in 1999.a Over the past 25 years,the BOJ has implemented various unconventional monetary easing policies to overcome mild but long-standing deflation.These include a zero-interest rate policy(19992000),quantitative easing(20012006),comprehensive monetary easing(20102013),and qualitat

87、ive and quantitative monetary easing(QQE)with yield curve control(YCC)(2013present).The BOJ has become not only a pioneer in pursuing unconventional monetary policies but also a reference point for other central banks.Kuroda was renowned for being a bold monetary easing practitioner(Kowalewski and S

88、hirai 2023a,2023b).This box will provide a brief overview of the unconventional monetary policy measures the BOJ has undertaken over the past decade and highlight recent changes under the new governor,Kazuo Ueda.The impact of unconventional monetary easing on developments in domestic bond markets an

89、d the associated impact on exchange rates will also be explored.Unprecedented Scale of Monetary Easing Initiated Under Kurodas GovernorshipIn January 2013,the Government of Japan,led by the newly elected liberal democratic party,and the BOJ jointly adopted the 2%price stability target,the first sing

90、le numerical target adopted in line with global standards.Kuroda assumed the governorship of the BOJ in March 2013 and at his first monetary policy meeting the next month he implemented bold,unprecedented monetary easing known as QQE.The new policy featured the adoption of a monetary base control as

91、 the operational target,shifting away from the conventional policy rate(uncollateralized overnight call rate)control.The QQEs key aim was to achieve 2%inflation within about 2years by emphasizing the size of monetary easing by using a monetary base.An annual increase in the monetary base in the rang

92、e of JPY60 trillionJPY70 trillion was set by purchasing Japanese Government Bonds(JGBs)worth about JPY50 trillion up to the maximum 40-year maturity,together with exchange-traded funds and Japanese real estate investment trusts.Before QQE,Japan faced an overvaluation of the yen for an extended perio

93、d,reflecting low inflation and the yens safe-haven currency status similar to the Swiss franc.When economic recessions took place as,first a result of the Lehman shock in 2008 and then the East Japan Earthquake and nuclear power plant accident in 2011,the yen appreciated further,adversely impacting

94、Japanese manufacturers.For most of 20102011,the exchange rate remained below JPY80 to USD1.This trend was finally reversed in late 2012 when the liberal democratic party won a landslide victory in the general election.Just before the election,the party had begun to stress the need for both a 2%price

95、 stability target and unlimited massive monetary easing to achieve the target.Therefore,the formation of a new government generated speculation among investors that massive monetary easing would be forthcoming under the newly elected BOJ governor in the following year.The depreciation of the yen,tog

96、ether with higher economic growth in 2013,contributed to turning deflation to inflation and increasing long-term inflationary expectationssuch as the inflation swap forward(5Y5Y)shifting from a negative rate in November 2012 to 1.0%by the middle of 2016.However,the increase in long-term inflationary

97、 expectations did not last long and began to decline from around mid-2014,partly due to the slowdown in economic growth caused by a consumption tax hike in April 2014 and partly due to a sharp decline in oil prices.The increase in the consumption tax from 5%to 8%boosted Japans inflation by around 2

98、percentage points to about 4%and generated a substantial price shock,thus reducing household consumption and weakening economic growth.The combination of these factors led the BOJ to expand QQE in October 2014,while the yen depreciated to about JPY125 to USD1 by the middle of 2015(Figure B.1).In res

99、ponse to unfavorable economic conditions,the BOJ decided to accelerate the annual pace of expansion in the monetary base from JPY6070 trillion trillion to about JPY80trillion.Toachieve this monetary base targeting,the amount outstanding of JGB holdings was increased through massive purchases of abou

100、t JPY80 trillion annually.Purchases of exchange-traded funds and Japanese real estate investment trusts were also increased.This revision of the QQE parameters contributed to the further depreciation of the yen,but this depreciation did not translate into higher long-term inflationary expectations t

101、his time.In October 2014,the yield of the Japanese yen inflation swap forward(5Y5Y)was well above 1.0%;by early February 2015,it had a This box was written by Sayuri Shirai,an advisor for sustainable policies at the Asian Development Bank Institute,a professor at the Faculty of Policy Management of

102、Keio University,and a former policy board member of the Bank of Japan.continued on next pageDevelopments in Regional Financial Conditions 5Boxcontinuedwhich accounted for almost 40%of all JGBs outstanding at that time.The resultant scarcity of JGBs reduced liquidity and the functioning of the JGB ma

103、rket.Another was a correction of the 10-year yield,which had fallen into negative territory(0.25%)and generated negative returns for institutional investors(FigureB.1).Thecentral bank found it increasingly challenging to meet the monetary base target by simply purchasing more JGBs.Inaddition,the ris

104、ing scarcity of JGBs reduced liquidity and the functioning of the JGB market.The BOJ thus needed to find a new approach to switch from the quantity-based operational target(Shirai2018).Under the YCC,the BOJ was able to reduce the amount of JGB purchases steadily and the 10-year yield remained low fr

105、om 2016 to early 2022.The COVID-19 Pandemic,Yield Curve Control,and the Yens Sharp DepreciationIn the face of the coronavirus disease(COVID-19)pandemic,many developed economies took unprecedented monetary and fiscal measures in tandem to mitigate the adverse economic effects caused by lockdowns and

106、mobility controls.While the FederalReserve and the European Central Bank conducted massive asset purchases,the BOJs reaction was rather muted in terms of such purchases.Instead,it launched new 1-year lending programs at 0%to foster banks credit extensions to the private sector while maintaining the

107、YCC.Topromote banks borrowing from the BOJ,the pool of eligible collateral was expanded.The interest rate applied to the BOJs outstanding current account balances corresponding to the outstanding amounts of these loans was also raised to a range of 0.1%0.2%to mitigate the adverse impacts of the nega

108、tive interest rate policy and promote bank lending.This facility was terminated in March 2023.Under the YCC,the yendollar exchange rate remained relatively stable and more or less fair-valued in a range of JPY105JPY115 to USD1 for more than 5 years.This exchange rate development changed suddenly in

109、2022,when almost all central banks worldwide started to raise their policy rates to cope with rising inflation.By not raising its rates,the BOJ was the only exception among all developed economies.This interest rate divergence,supported by the YCC,was strong enough to generate substantial yen deprec

110、iation.Theexchange rate exceeded JPY150 to USD1 briefly in October 2022 and has since reversed to around JPY130JPY140 to USD1 with substantial fluctuations,mainly reflecting the decline in the 10-year yield in the US,Japans Ministry of Finances intervention in the foreign exchange market in Septembe

111、rOctober 2022,as well as the BOJs fallen to slightly above 0.6%.In 2016,the BOJ became the fifth major central bank in the world to announce a negative interest rate policy,adding to the policy goals of QQE.The negative rate(0.1%),however,was applied to only a small portion of the BOJs current accou

112、nt balance.Adopting a three-tier system with the deposit interest rates of 0.1%,0%,and 0.1%,the BOJ took every possible effort to minimize the damage of negative interest rates on banks profitability.Yield Curve Control as a Turning Point in the Bank of Japans Monetary EasingIn September 2016,the BO

113、J introduced YCC,which sought to stabilize the 10-year yield at around 0%in conjunction with the negative interest rate policy.The YCC was a big leap from the QQE since the operation target was changed from the monetary base control to the two short-and long-term interest rates(i.e.,0.1%applied to p

114、art of the current account balance and 0%to the 10-year yield).TheYCC concept reflected the experience of the UnitedStates(US),which set a cap on the yields of 10-year Treasury securities(2.5%)and 3-month Treasury bills(0.375%)during WorldWar II to reduce government deficits driven by increased spen

115、ding following the US entry into the war.The BOJ aimed for the YCC to exert strong downward pressure on long-term interest rates and thus stimulate aggregate demand(Amamiya2017).Meanwhile,market participants widely viewed that the switch to the YCC was undertaken for two reasons.One reason was to co

116、rrect the tensions created in bond markets due to a substantial concentration of JGB holdings on the BOJs balance sheet,continued on next pageLHS=left-hand side,RHS=right-hand side,US=United States.Source:Federal Reserve Bank of St.Louis.FRED Economic Data(accessed 10June 2023).Figure B.1:The Japane

117、se Yen versus the United States Dollar,and the 10-Year Yield in Japan and theUnited States5.04.03.02.01.00.01.0011010090Yield(%)US dollaryenUS DollarYen(RHS)2013 2014 2015 2016 2001820202022 2023Japans 10-Year Yield(LHS)US 10-Year Yield(LHS)6Asia Bond Monitor November 2023Boxco

118、ntinuedOver the past decade,Japan gradually moved away from deflation to moderate inflation,and inflation has been above the 2%price stability target since April 2022(Figure B.3).TheBOJs monetary easing,in spite of the scale and various tools adopted,could not achieve the 2%inflation target except w

119、hen the consumption tax hike in April 2014 briefly resulted in the rate of inflation exceeding 2%.Then,due to commodity price hikes and the depreciation of the yen,the rate of inflation again exceeded 2%in April 2022 and has remained above 3%since August 2022.However,this is mostly cost-push inflati

120、on.Currently,about 70%of inflation is due to food price hikes as government subsidies maintain low energy-related inflation.Another nearly 10%of inflation is due to an increase in hotel fees driven by a growing number of inbound tourists,which is partly a result of the sharp depreciation of the yen.

121、The BOJ has not declared victory,even though inflation has exceeded the 2%target for more than 1 year,since the contributing factorssuch as commodity prices and the depreciation of the yenare external in nature and likely to dissipate.The BOJ therefore maintains monetary easing because inflation is

122、projected to decline toward the end of 2023 and may fall below 2%again in the foreseeable future.However,the likelihood of inflation returning to negative territory is low because of various supply-side factors such as labor shortages,rising production costs in the PeoplesRepublic of China(and the r

123、elocation of production to Japan and other countries as part of the de-risking process),climate change,and the Russian invasionofUkraine.monetary policy adjustment pointed out below.The yens undervaluation contributed to import inflation and sluggish consumption growth.In late 2022,the BOJ expanded

124、its tolerance band around the 10-year yield target from 25 basis points(bps)to 50bps.This surprise move created substantial volatility in the JGB bond market,mainly because of the previous rejection of such a policy by the BOJ in September 2022.The decision was made for several reasonsprimarily,to c

125、orrect distortions and improve the functioning of the bond market.This policy adjustment contributed to a reversal of the depreciation of the yen and thus the yen appreciated to around JPY130 per USD1 by early 2023.The first 4 months of 2023 before the end of Kurodas governorship confirm that this w

126、as a step in the right direction since the bond markets functioning improved moderately.Meanwhile,many market participants believe that the BOJs surprise action was taken to cope with the yens undervaluation.The Japanese bond market has stabilized somewhat since February this year and issues observe

127、d in the world banking system caused by the collapse of Silicon Valley Bank and the Credit Suisse scandals did not cause particular tensions from the point of view of preserving the YCC framework.Atthe same time,the decade-long unconventional monetary experiments ended up expanding the BOJs balance

128、sheet significantly to JPY735 trillion at end-March 2023 from JPY166 trillion at end-March 2013 and JGB holdings to JPY576 trillion from JPY 91 trillion during the same period,accounting for 53%of outstanding JGBs(Figure B.2).continued on next pageBOJ=Bank of Japan,JGB=Japanese Government Bond,JPY=J

129、apanese yen.Source:Prepared by the author based on Bank of Japan Flow of Funds(accessed 5 September 2023).Figure B.2:Japanese Government Bonds Outstanding and the Holdings of the Bank of Japan1,2001,000800600400200020222012 2013 2014 2015 2016 2017 2018 2019 2020 2021JPY trillionBOJ Holdings of JGBs

130、Outstanding JGBsNote:The consumption tax hike from 5%to 8%in April 2014 led to an increase in the headline inflation rate of around 2 percentage points.Source:Official Statistics of Japan(accessed 7 October 2023).Figure B.3:Inflation in Japan5432101232013 2014 2015 2016 2017 2018 2019 2020 2021 2022

131、 2023%HeadlineInflation excluding all food and energyDevelopments in Regional Financial Conditions 7BoxcontinuedThe yen depreciated even further after this policy response because of the expectation that the interest rate differential between Japan and the US would remain large for an extended perio

132、d.Meanwhile,market participants are increasingly expecting the BOJ to take more steps to normalize monetary policy by the end of next year,including the abolishment of negative interest rates and/or the removal of the 10-year yield target set at around 0%and the abolishment of the 10-year yield cont

133、rol.It is noticeable that the governor recently started mentioning the possibility of ending negative interest rates if the BOJ gains confidence that persistent inflation will be accompanied by wage growth.Themarket interpreted this as BOJs efforts to correct excessive yen depreciation by hinting at

134、 the possibility of further policy adjustments toward normalization.Thus,the market is likely to continue exerting upward pressure on 10-year interest rates,testing the BOJs resolve.Appropriate Steps for NormalizationFinally,let us assume that the BOJ has decided to steer toward normalization,tempor

135、arily setting aside the agenda of achieving 2%price stability.In this case,the following sequence for normalization can be envisaged:First,abolishing the 0.5%reference on 10-year interest rates and establishing a clear range with a 1 percentage point fluctuation margin could be pursued to enhance tr

136、ansparency.Next,eliminating the targeted 0%yield for the 10-year JGB could be examined since the 0%target is no longer binding and the reference rate currently has a more significant impact It is yet to be seen how the policies pursued by the BOJ in the last decade will be evaluated in the future.Ku

137、rodas legacy at the BOJ depends on how the BOJs new governor,KazuoUeda,will treat his predecessors policy.On this front,it is important to conduct a broad-perspective review of monetary policy covering a period of 25 years,which the new BOJ policy board promised to do within 1.01.5 years at its firs

138、t monetary policy meeting in April 2023.New Challenges for the New Governor From the beginning,the new BOJ governor stressed the importance of achieving stable 2%inflation based on a virtuous demand-driven,wage-price cycle and the need to maintain monetary easing to do so.At the same time,the govern

139、or also pointed out the side effects arising from the YCCsuch as distortions in the JGB marketand indicated that such side effect should be dealt with to sustain monetary easing if the BOJ finds that monetary easing will have to be maintained longer than it expects.While market participants expected

140、 the BOJs actions toward normalization,the YCC was maintained at the April and June monetary policy meetings.However,the BOJ increased its flexibility in July by expanding the 10-year ceiling from 50bps to 100 bps and by keeping 50bps as thereference.Since the yen has depreciated against the dollar

141、by about 13%year-to-date in 2023,market participants widely view the BOJs action as a response to mitigate the yens excessive undervaluation and the subsequent cost-push inflation,which are hurting consumers and importers.There are no currencies among Japans major trading partners that have deprecia

142、ted since 2021 to the same extent as the yen(FigureB.4).Theresurgence of yen depreciation since late May this year can be attributed to the BOJ signaling that it favors the current pace of monetary easing to achieve stable 2%inflation.Theunexpectedly robust US economy,coupled with a services inflati

143、on rate(excluding energy)in the 5%range,driven by strong domestic demand and a tight labor market,suggests that there is little likelihood of an interest rate cut in the near term.The Federal Reserve may either raise interest rates once more this year or maintain the current rate until around the mi

144、ddle of 2024.Given this scenario,theBOJs insistence on maintaining the status quo could benefit yen carry trades due to the stable interest rate differential.Hence,market participants view that the policy adjustment in July 2023 may have been deemed necessary to correct excessive yendepreciation.US=

145、United States.Source:Bank for International Settlements database(accessed 7 October 2023).Figure B.4:Nominal Effective Exchange Rates of Major Currencies8070202120222023January 2021=100Chinese yuanEuroJapanese yenUS dollarcontinued on next page8Asia Bond Monitor November 2023Boxcontinuedn

146、egative at 2.2%.The BOJ hopes that wage growth may lead to the virtuous demand-driven,wage-price spiral.Currently,however,domestic demand remains weak partly because of negative wage growth.Inflation driven by strong consumer demand seems quite challenging at this stage,given the 2-decades-long peri

147、od of wage stagnation,an increasing share of the elderly population relying solely on pensions,and expectations of tax hikes considering Japans public debt.It is thus uncertain whether firms can achieve higher profits by raising productivity and offering higher wages to achieve positive real wage gr

148、owth on a sustainable basis.ReferencesAmamiya,Masayoshi.2017.“History and Theories of Yield Curve Control.”Keynote Speech at the Financial Markets Panel Conference to Commemorate the 40th Meeting of the Bank of Japan,Tokyo.https:/www.boj.or.jp/en/about/press/koen_2017/data/ko170111a1.pdf.Kowalewski,

149、Pawel,and Sayuri Shirai.2023a.“History of Bank of Japans More Than Two Decades of Unconventional Monetary Easing with Special Emphasis on the Frameworks Pursued in the Last 10 Years.”Asian Development Bank Institute Working Paper No.1380.https:/www.adb.org/publications/history-of-bank-of-japan-s-mor

150、e-than-two-decades-of-unconventional-monetary-easing-with-special-emphasis-on-the-frameworks-pursued-in-the-last-10-years._.2023b.“A Quarter of a Century of the BoJs Efforts to Overcome Liquidity Trap.”Bank i Kredyt(Central Bank of Polands Journal)54(4):33564.https:/bankikredyt.nbp.pl/content/2023/0

151、4/BIK_04_2023_01.pdf.Shirai,Sayuri.2018.Mission Incomplete:Reflating Japans Economy.Tokyo:Asian Development Bank Institute.https:/www.adb.org/publications/mission-incomplete-reflating-japan-economy.on the prevailing 10-year yield.However,some market participants may interpret this action as another

152、step toward normalization,potentially generating further upward pressure on the 10-year yield.Once the 10-year target is abolished,the next step could be the elimination of negative interest rates applied to part of the excess current account balance,while transitioning to 0%.As having both the 10-y

153、ear interest rate and short-term interest rates at 0%does not seem desirable from a yield curve perspective,this sequencing is important.As these steps are taken,it is likely that the volatility of the 10-year interest rate will increase.Furthermore,in the longer term,considering the future natural

154、interest rate and price trends,the 10-year yield might rise above 1%.This reflects that the natural interest rate is expected to rise due to factors such as corporate green and digital investments,the drawdown of savings associated with the retirement of the baby boomer generation,and fiscal factors

155、.In terms of prices,several factorssuch as the increasing need for diversifying sources of production and procurement due to geopolitical risks,climate change,and wage increases due to labor shortageswill contribute to the likelihood of higher inflation compared to the period before the COVID-19 cri

156、sis.Therefore,it is necessary for the government and businesses to prepare for a prolonged increase in long-term interest rates.Considering this,it might be appropriate to postpone the abolition of the 10-year interest rate fluctuation range until the public and investor understanding about the dire

157、ction of monetary policy is strengthened through improved central bank communication.Lastly,large Japanese companies increased regular wages by around 4%during this years spring wage negotiations with labor unions,partly in response to the governments call for higher wages and the need to compensate

158、 for the rising cost of living.However,Japans average nominal wage growth from April to August this year,including small and medium-sized companies,was only 1.6%.Average real wage growth remained Developments in Regional Financial Conditions 9Table B:Changes in Monetary Stances in Major Advanced Eco

159、nomies and Select Emerging East Asian Economies EconomyPolicy Rate 1-Nov-2022(%)Rate Change(%)Policy Rate 10-Nov-2023(%)Change in Policy Rates(basis points)Nov-2022Dec-2022Jan-2023Feb-2023Mar-2023Apr-2023May-2023Jun-2023Jul-2023Aug-2023Sep-2023Oct-2023Nov-2023Euro Area0.75 0.75 0.50 0.50 0.50 0.25 0

160、.25 0.25 0.25 4.00 325 Japan(0.10)(0.10)0United Kingdom2.25 0.75 0.50 0.50 0.25 0.25 0.50 0.25 5.25 300 United States3.25 0.75 0.50 0.25 0.25 0.25 0.25 5.50 225 China,Peoples Rep.of2.75 0.10 0.15 2.50 25 Indonesia4.75 0.50 0.25 0.25 0.25 6.00 125 Korea,Rep.of3.00 0.25 0.25 3.50 50 Malaysia2.50 0.25

161、0.25 3.00 50 Philippines4.25 0.75 0.50 0.50 0.25 0.25 6.50 225 SingaporeThailand1.00 0.25 0.25 0.25 0.25 0.25 0.25 2.50 150 Viet Nam6.00 0.50 0.50 0.50 4.50 150()=negative,=no change,=no data.Notes:1.Data coverage is from 1 November 2022 to 10 November 2023.2.For the Peoples Republic of China,data u

162、sed in the chart are for the 1-year medium-term lending facility rate.While the 1-year benchmark lending rate is the official policy rate of the Peoples Bank of China,market players use the 1-year medium-term lending facility rate as a guide for the monetary policy direction of the Peoples Bank of C

163、hina.3.The up(down)arrow for Singapore signifies monetary policy tightening(loosening)by its central bank.The Monetary Authority of Singapore utilizes the Singapore dollar nominal effective exchange rate to guide its monetary policy.Sources:Various central bank websites.Figure B:Inflation in Major A

164、dvanced Economies and Select Emerging EastAsian Economiesy-o-y=year-on-year.Notes:1.Data coverage is from July to October 2023 except for Malaysia(September 2023).2.For the Peoples Republic of China,inflation for August and September 2023 was 0.1%y-o-y and 0.0%y-o-y,respectively.Sources:Various loca

165、l sources.86420(2)%,y-o-ySep 2023Oct 2023Jul 2023Aug 2023China,PeoplesRepublic ofUnitedStatesJapanEuroAreaHong Kong,ChinaIndonesiaKorea,Republic ofMalaysiaPhilippinesSingaporeThailandViet Nam10Asia Bond Monitor November 2023Gloomy economic outlooks in the region and globally,combined with negative i

166、nvestor sentiments amid expectations of higher-for-longer US interest rates,drovea retreat in most emerging East Asian equity markets and the widening of risk premiums across the region.Theregions equity market dropped by an averageof 4.9%(simple)and 4.3%(market-weighted)during the review period(Fig

167、ure D).Thelargestequitylosses were recorded in Thailand(11.0%)and Viet Nam(10.0%)over doubts about their respective economic prospects.Equity markets in the region posted further losses after the September FOMC minutes were released on 12 October,which indicated an extended period of elevated rates,

168、and subsequently on 17 October over rising concerns about the current conflict in the Middle East.Regional equity markets,however,rebounded after the Federal Reserve left rates unchanged in its November FOMC meeting but the recovery was short-lived as hawkish speeches by some Federal Reserve officia

169、ls on subsequent days dragged down sentiments in the regions equity markets.Risk premiums,as measured by credit default swap spreads,widened by 3.3 bps(simple average)and 1.4 bps(GDP-weighted average)during the review period(Figure E).In some markets,the risk premiums reflect market-specific uncerta

170、inties,including a weakened economic outlook.Credit default Figure D:Movements in Equity Indexes in Select Emerging East Asian MarketsASEAN=Association of Southeast Asian Nations,EEA=emerging East Asia,FOMC=Federal Open Market Committee,PRC=Peoples Republic of China,US=United States.a Federal Reserv

171、e leaves rates unchanged and signals that it would keep interest rates elevated for a longer period.b Dovish speeches from Federal Reserve officials.c September FOMC minutes confirming higher interest rate for a longer period.d Rising concerns over the current conflict in the Middle East.e Federal R

172、eserve leaves rates unchanged;notes that financial conditions have tightened.f Hawkish speeches from Federal Reserve officials.Notes:1.ASEAN comprises the markets of Cambodia,Indonesia,the Lao Peoples Democratic Republic,Malaysia,the Philippines,Singapore,Thailand,and VietNam.2.Data are as of 10 Nov

173、ember 2023.Source:AsianBondsOnline calculations based on Bloomberg LP data.1 Sep 2023=1001 Sep 2023=100ab cdefHong Kong,ChinaASEANChina,Peoples Rep.ofKorea,Rep.ofEEA551-Sep11-Sep21-Sep1-Oct31-Oct 10-Nov21-Oct11-OctFigure C:Changes in Select Emerging East Asian Currencies versus

174、 the United States Dollar()=negative;BRU=Brunei Darussalam;CAM=Cambodia;HKG=HongKong,China;INO=Indonesia;KOR=Republic of Korea;LAO=Lao Peoples Democratic Republic;MAL=Malaysia;PHI=Philippines;PRC=Peoples Republic of China;SIN=Singapore;THA=Thailand;VIE=VietNam.Notes:1.A positive(negative)value for t

175、he foreign exchange rate indicates the appreciation(depreciation)of the local currency against the United States dollar.2.The numbers above(below)each bar refer to the change between 1September 2023 and 10 November 2023.Source:AsianBondsOnline calculations based on Bloomberg LP data.420(2)(4)(6)HKGV

176、IEKORPRCSINCAMLAO THAMALINOBRUPHI%Change between 1 Sep 2023 and 30 Sep 2023Change between 1 Oct 2023 and 31 Oct 2023Change between 1 Sep 2023 and 10 Nov 2023Change between 1 Nov 2023 and 10 Nov 2023(5.1)(2.9)(2.5)(1.3)(1.0)(0.6)(0.6)(0.3)0.10.50.91.1Figure E:Changes in Credit Default Swap Spreads in

177、 Select Emerging East Asian Markets(senior 5-year)INO=Indonesia;KOR=Republic of Korea;MAL=Malaysia;PHI=Philippines;PRC=Peoples Republic of China;THA=Thailand;VIE=Viet Nam.Note:The numbers above each bar refer to the change in spreads between 1September 2023 and 10 November 2023.Source:AsianBondsOnli

178、ne calculations based on Bloomberg LP data.30150(15)(30)INOPHIKORPRCTHAMALVIEBasis pointsChange between 1 Sep 2023 and 30 Sep 2023Change between 1 Oct 2023 and 31 Oct 2023Change between 1 Sep 2023 and 10 Nov 2023Change between 1 Nov 2023 and 10 Nov 20230.71.83.13.13.95.25.4Developments in Regional F

179、inancial Conditions 11economic outlook concerns.In Indonesia,foreign bond outflows of USD1.5 billion were recorded in September when its reported Q2 2023 current account deficit added pressure to the rupiah.Risks to the regions financial conditions remained balanced.On the downside,the Federal Reser

180、ve signaled it would keep interest rates higher for an extended period,which will lead to a longer period of elevated borrowing costs in most regional markets.Higher interest rates pose risks to borrowers with high leverage and liquidity needs to refinance their debts.For example,several high-profil

181、e property companies in the PRC have already experienced debt repayment difficulties.In economies where the banking sector has large exposure to these high-leveraged borrowers,the soundness of the banking sector and even the financial sector will be challenged.Similar liquidity stress is also presen

182、t in the Lao PeoplesDemocraticRepublic where the government needs to refinance its debt,a sizeable share of which is denominated in foreign currency.To safeguard financial stability,close monitoring of debt sustainability and liquidity conditions will be needed.Meanwhile,high interest rates will gen

183、erally add to fiscal burdens,which may weaken fiscal conditions in some regional markets()=negative,USD=United States dollar.Notes:1.Data coverage is from 1 September 2022 to 10 November 2023.2.The numbers above(below)each bar refer to net inflows(net outflows)for each month.3.Emerging East Asia is

184、defined to include member states of the Association of Southeast Asian Nations(ASEAN)plus the Peoples Republic of China;HongKong,China;andthe Republic of Korea.4.ASEAN-4 includes Indonesia,the Philippines,Thailand,and Viet Nam.Source:Institute of International Finance.Figure F:Capital Flows in Equit

185、y Markets in Emerging East Asia403020100(10)(20)NovFeb Mar Apr May Jun JulOctOctNovSepAugJan2023DecSep2022Korea,Rep.ofUSD billionASEAN-4China,Peoples Rep.of13.13.126.71.3(4.2)3.50.50.40.3(4.9)(14.8)(8.3)(9.8)1.07.4Figure G:Foreign Capital Flows in Select Emerging EastAsian Local Currency Bond Market

186、s()=negative,USD=United States dollar.Notes:1.The Republic of Korea and Thailand provided data on bond flows.For the Peoples Republic of China,Indonesia,Malaysia,and the Philippines,month-on-month changes in foreign holdings of local currency government bonds were used as a proxy for bond flows.2.Da

187、ta are as of 30 September 2023.3.Figures were computed based on 30 September 2023 exchange rates and do not include currency effects.Sources:Peoples Republic of China(Bloomberg LP);Indonesia(Directorate General of Budget Financing and Risk Management,Ministry of Finance);Republic of Korea(Financial

188、Supervisory Service);Malaysia(Bank Negara Malaysia);Philippines(Bureau of the Treasury);and Thailand(Thai Bond Market Association).151050(5)(10)(15)Sep2022Oct Nov DecJulAugSepJan2023FebMar Apr May JunUSD billionIndonesiaPhilippinesChina,Peoples Rep.ofMalaysiaKorea,Rep.ofThailandswap spreads in Viet

189、Nam and Indonesia widened the most in the region due to some weakness in their respective export sectors.Viet Nam also faces the risk of missing its 6.5%economic growth target for the year.The Federal Reserves signal of keeping interest rates elevated for an extended period dampened investor confide

190、nce in emerging East Asian capital markets,driving capital outflows.Regional equity markets experienced net foreign portfolio outflows of USD17.1billion from 1September to 10 November(FigureF).All markets in the region experienced outflows,with the PeoplesRepublicofChina(PRC)accounting for the large

191、st share,equivalent to USD11.3billion,amid moderation in economic performances.The RepublicofKorea also saw significant outflows of USD2.6 billion,reflecting the weak performance of the semiconductor industry,which faced a 32.6%decline in exports in the first 9 months of 2023 compared to the same pe

192、riod last year.Among Association of Southeast Asian Nations economies,aggregate net portfolio outflows amounted to USD3.1 billion,with Thailand registering the largest outflows at USD1.3 billion due to policy uncertainties under the new government.Meanwhile,the regions bond markets experienced forei

193、gn outflows of USD5.9 billion in September(FigureG).The PRC recorded the largest foreign bond outflows at USD1.8 billion in September,driven by 12Asia Bond Monitor November 2023even with sound fundamentals.For example,to support the economy,Thailand has introduced stimulus measures,while Indonesia i

194、ncreased its borrowing plans in the fourth quarter of the year.With higher interest rates,these measures become more costly,weakening the fiscal balance and possibly the local currency too.On the positive side,inflation rates are largely expected to moderate next year,which,combined with headwinds t

195、o the regional economic outlook and heightened financial risks,could possibly ease the pressure of persistently high interest rates.While food and oil prices have risen and pushed up inflation recently,this is likely to be transient and inflation should decelerate next year,based on estimates in the

196、 recent Asian DevelopmentOutlook,and over the medium-term,according to Capital Economics Global Inflation Watch.Previous monetary tightening measures by regional central banks have yet to fully pass through and could also ease inflationary pressures.Moreover,various headwinds weighing on the regiona

197、l economic outlook,including subdued global demand and a strained property market and weakened domestic demand in the PRC,together with looming financial risks from higher interest rates,may encourage central banks to consider ending their tightening stances to support economic growth.Bond Market De

198、velopmentsin the Third Quarter of 2023Section 1.Local Currency Bonds OutstandingThe emerging East Asian local currency(LCY)bond market posted annual growth of 8.2%in the third quarter(Q3)of 2023,reaching a size of USD23.5trillion at the end of September.3 Annual growth in the emerging EastAsian LCY

199、bond market continued to surpass that of the UnitedStates(US)(8.1%)and the European Union 20s(EU-20)(6.1%).By the end of September 2023,the emerging EastAsian LCY bond market was equivalent in size to 114.8%of the EU-20 bond market(USD20.5trillion)and 62.8%of the US bond market(USD37.5 trillion)(Fig

200、ure1).All emerging East Asian LCY bond markets posted positive quarterly growth in Q3 2023,with growth in both regional government and corporate bonds outstanding picking up(Table 1).Growth in emerging East Asian outstanding government bonds rose to 3.0%quarter-on-quarter(q-o-q)in Q3 2023 from 2.4%q

201、-o-q in the second quarter(Q2)of 2023,driven largely by accelerated sovereign and local government bond issuance in the Peoples Republic of China(PRC)aimed at supporting economic recovery.Meanwhile,growth in the regions LCY corporate bond market inched up to 1.5%q-o-q in Q3 2023 from 1.4%q-o-q in th

202、e preceding quarter(Figure 2).LCY bonds outstanding among members of the Association of Southeast Asian Nations(ASEAN)reached USD2.1 trillion at the end of September,accounting for 9.0%of the emerging East Asian aggregate.Meanwhile,LCY bond markets in the PRC(USD18.7 trillion)and the Republic of Kor

203、ea(USD2.3trillion)accounted for 79.4%and 10.0%of the regional total,respectively.Government bonds comprised 62.4%of regional LCY bonds,totaling USD14.7 trillion at the end of September,followed by corporate bonds(USD8.3 trillion)and central bank bonds(USD0.5 trillion)accounting for 35.3%and 2.3%,res

204、pectively(Figure 3).The majority of LCY Treasury bonds in emerging EastAsia have a remaining maturity of more than 5years,limiting the impact of higher interest rates.Theregions Treasury bonds outstanding had a size-weighted-average tenor of 8.7 years at the end of September,with 53.7%of outstanding

205、 bonds carrying maturities of longer than 5 years.Across the region,the PRC;the Philippines;and Hong Kong,China had 52.4%,53.8%,and 84.8%,respectively,of their outstanding Treasury bonds carrying maturities of 5 years or less at the end of September(Figure 4).3 Emerging East Asia is defined to inclu

206、de member states of the Association of Southeast Asian Nations(ASEAN)plus the Peoples Republic of China;Hong Kong,China;and theRepublic of Korea.EU=European Union,US=United States,USD=United States dollar.Notes:1.Emerging East Asia is defined to include the Association of Southeast Asian Nations plu

207、s the Peoples Republic of China;Hong Kong,China;and theRepublic of Korea.2 The EU-20 includes EU member markets Austria,Belgium,Croatia,Cyprus,Estonia,Finland,France,Germany,Greece,Ireland,Italy,Latvia,Lithuania,Luxembourg,Malta,the Netherlands,Portugal,Slovakia,Slovenia,and Spain.Sources:Peoples Re

208、public of China(CEIC Data Company);Hong Kong,China(Hong Kong Monetary Authority);EU-20(Bloomberg LP);Indonesia(BankIndonesia;Directorate General of Budget Financing and Risk Management,Ministry of Finance;and Indonesia Stock Exchange);Republic of Korea(BankofKorea and KG Zeroin Corporation);Malaysia

209、(Bank Negara Malaysia);Philippines(Bureau of the Treasury and Bloomberg LP);Singapore(Monetary Authority of Singapore,Singapore Government Securities,and Bloomberg LP);Thailand(Bankof Thailand);UnitedStates(Bloomberg LP);and Viet Nam(Vietnam Bond Market Association and Bloomberg LP).Figure 1:Local C

210、urrency Bonds Outstanding in Emerging East Asia,the EU-20,and the United States4030202000022Sep-232020USD trillionEmerging East AsiaEU-20US14Asia Bond Monitor November 2023Table 1:Size and Composition of Select Emerging East Asian Local Currency Bond Marke

211、tsQ3 2022Q2 2023Q3 2023Growth Rate(%)Amount(USD billion)%of GDPAmount(USD billion)%of GDPAmount(USD billion)%share%of GDPQ3 2023q-o-q y-o-yChina,Peoples Rep.of Total17,676104.818,325107.418,675100.0109.22.5 8.4 Treasury and Other Government11,51068.212,12271.012,44066.672.73.3 10.9 Central Bank20.01

212、20.0120.010.010.0 0.0 Corporate6,16436.56,20136.36,23333.436.41.1 3.7 Hong Kong,China Total35096.936699.6385100.0103.05.1 9.7 Treasury and Other Government308.3308.1379.69.923.2 22.2 Government15242.215742.615841.142.41.1 3.7 Corporate16846.418048.819049.350.85.6 13.0 Indonesia Total37730.340929.939

213、9100.029.80.5 7.2 Treasury and Other Government34427.637627.536691.927.30.5 8.0 Central Bank30.240.340.90.36.8 23.9 Corporate302.4302.2297.22.1(0.02)(3.0)Korea,Rep.of Total2,071151.12,347156.42,347100.0159.62.4 6.8 Treasury and Other Government79758.290460.289338.160.71.2 5.6 Central Bank866.3946.39

214、34.06.31.0 2.0 Corporate1,18886.71,34989.91,36158.092.53.3 8.0 Malaysia Total400124.8419126.7422100.0127.51.5 7.0 Treasury and Other Government22570.423972.324056.872.51.1 7.9 Central Bank0.90.330.830.81.029.2 273.5 Corporate17354.217753.617942.454.11.7 4.5 Philippines Total19052.621250.4210100.050.

215、21.8 6.5 Treasury and Other Government15743.417541.617181.340.80.3 4.8 Central Bank71.982.0125.72.944.8 65.4 Corporate267.2296.92713.16.6(2.4)1.2 Singapore Total450101.9504105.7512100.0107.92.6 8.2 Treasury and Other Government16036.218037.718335.738.52.8 8.8 Central Bank16737.819841.420439.943.04.4

216、 16.5 Corporate12428.012726.612524.426.4(0.5)(3.7)Thailand Total41190.445991.7455100.092.91.9 6.9 Treasury and Other Government22750.125751.425656.352.32.3 8.6 Central Bank6714.76713.46714.813.73.1(2.9)Corporate11625.613526.913228.928.90.4 9.0 Viet Nam Total9825.310826.0109100.026.63.9 12.5 Treasury

217、 and Other Government6617.07818.97771.218.91.5 19.0 Central Bank10.300.043.60.9208.6 Corporate318.0297.02725.36.7(3.1)(9.4)Emerging East Asia Total22,024101.023,148103.223,514100.0104.92.5 8.2 Treasury and Other Government13,51762.014,36064.014,66462.465.43.010.3 Central Bank4862.25322.45482.32.44.2

218、 8.9 Corporate8,02036.88,25636.88,30335.337.01.5 4.5 Japan Total9,093237.49,358237.19,034100.0233.4(0.1)2.5 Treasury and Other Government8,394219.18,654219.38,33992.3215.5(0.3)2.5 Central Bank320.8140.3130.10.3(3.7)(58.5)Corporate66717.469117.56827.617.62.2 5.6()=negative,=not applicable,GDP=gross d

219、omestic product,q-o-q=quarter-on-quarter,Q2=second quarter,Q3=third quarter,USD=United States dollar,y-o-y=year-on-year.Notes:1.For the Peoples Republic of China,Q3 2023 bonds outstanding data are based on AsianBondsOnline estimates.For Singapore,corporate bonds outstanding are based on AsianBondsOn

220、line estimates.2.GDP data are from CEIC Data Company.3.Bloomberg LP end-of-period local currencyUSD rates are used.4.Growth rates are calculated from a local currency base and do not include currency effects.For emerging East Asia,growth figures are based on 30 September 2023 currency exchange rates

221、 and do not include currency effects.Sources:Peoples Republic of China(CEIC Data Company);Hong Kong,China(Hong Kong Monetary Authority);Indonesia(Bank Indonesia;Directorate General of Budget Financing and Risk Management,Ministry of Finance;and Indonesia Stock Exchange);Republic of Korea(Bank of Kor

222、ea and KG Zeroin Corporation);Malaysia(Bank Negara Malaysia);Philippines(Bureau of the Treasury and Bloomberg LP);Singapore(Monetary Authority of Singapore and Bloomberg LP);Thailand(Bank of Thailand);and Viet Nam(Vietnam Bond Market Association and Bloomberg LP).Bond Market Developments in the Thir

223、d Quarter of 202315Figure 2:Growth of Select Emerging East Asian Local Currency Bond Markets in the Second and Third Quarters of 2023(q-o-q,%)()=negative;HKG=Hong Kong,China;INO=Indonesia;KOR=Republic of Korea;MAL=Malaysia;PHI=Philippines;PRC=Peoples Republic of China;Q2=second quarter;Q3=third quar

224、ter;q-o-q=quarter-on-quarter;SIN=Singapore;THA=Thailand;VIE=Viet Nam.Notes:1.For the Peoples Republic of China,Q3 2023 bonds outstanding data are based on AsianBondsOnline estimates.For the Republic of Korea,Q3 2023 government bonds outstanding data are as of August 2023.For Singapore,corporate bond

225、s outstanding are based on AsianBondsOnline estimates.2.Growth rates are calculated from a local-currency base and do not include currency effects.For emerging East Asia,growth figures are based on 30September 2023 currency exchange rates and do not include currencyeffects.Sources:Peoples Republic o

226、f China(CEIC Data Company);Hong Kong,China(Hong Kong Monetary Authority);Indonesia(Bank Indonesia;Directorate General of Budget Financing and Risk Management,Ministry of Finance;and Indonesia Stock Exchange);Republic of Korea(Bank of Korea and KG Zeroin Corporation);Malaysia(Bank Negara Malaysia);Ph

227、ilippines(Bureau of the Treasury and Bloomberg LP);Singapore(Monetary Authority of Singapore and Bloomberg LP);Thailand(Bank of Thailand);and Viet Nam(Vietnam Bond Market Association and Bloomberg LP).%EmergingEast AsiaHKGVIESINTHAKORPRCPHIINOMAL6420(2)(4)Q2 2023Q3 2023ASEAN=Association of Southeast

228、 Asian Nations;HKG=Hong Kong,China;KOR=Republic of Korea;PRC=Peoples Republic of China.Note:ASEAN comprises the markets of Indonesia,Malaysia,the Philippines,Singapore,Thailand,and Viet Nam.Source:AsianBondsOnline calculations based on various local sources.Figure 3:Local Currency Bonds Outstanding

229、by Economy and Type of Bond as of 30 September 2023HKGKORPRCTreasury and Other GovernmentCentral BankCorporateASEANHKG=Hong Kong,China;INO=Indonesia;KOR=Republic of Korea;MAL=Malaysia;PHI=Philippines;PRC=Peoples Republic of China;SIN=Singapore;THA=Thailand;VIE=Viet Nam.Note:Treasury bonds are local-

230、currency-denominated fixed-income securities with maturities longer than 1 year and issued by the national government.Sources:Peoples Republic of China(Bloomberg LP);Hong Kong,China(HongKong Monetary Authority);Indonesia(Directorate General of Budget Financing and Risk Management,Ministry of Finance

231、);Republic of Korea(Bloomberg LP);Malaysia(Bank Negara Malaysia Fully Automated System for Issuing/Tendering);Philippines(Bureau of the Treasury);Singapore(Monetary Authority of Singapore);Thailand(Bank of Thailand);and Viet Nam(BloombergLP).Figure 4:Maturity Structure of Local Currency Treasury Bon

232、ds Outstanding in Select Emerging EastAsian Markets0PRCKORMALPHISINTHAVIEHKGINO3 to 5 years1 to 3 years5 to 10 years10 years%shareShare of bond tenors 5 yearsBy the end of September,domestic investors held 89.4%of emerging East Asian LCY Treasury bonds.Banking institutions,on average,held

233、 more than half of outstanding Treasury bonds in the region at the end of September(Figure 5).The largest shares of bank holdings were observed in the PRC(almost 70%)and the Philippines(nearly 50%).The major presence of banking institutions among investors in the PRC translated to the regions second

234、-highest HerfindahlHirschman Index score,which is a measure of market concentration used to determine market competitiveness.Meanwhile,Viet Nam had the highest HerfindahlHirschman Index score in emerging East Asia as its market has only two dominant investors:insurance companies with a share of 59.7

235、%and banks with 39.9%.Insurance and pension fund investors comprised a substantial share of investment in the Treasury bond market in Thailand(44.4%),Malaysia(33.3%),and theRepublic of Korea(28.2%).Indonesia was the regions most diversified bond market at the end of Q3 2023,having the lowest Herfind

236、ahlHirschman Index score in emerging EastAsia.For all investor types except banks(29.7%)and mutual funds(3.3%),the average market share was 16.7%.Indonesia was also the only market in the region whose central bank had substantial investor holdings(16.9%).16Asia Bond Monitor November 2023Section 2.Lo

237、cal Currency Bond IssuanceLCY bond issuance in emerging East Asia accelerated to USD2.5 trillion in Q3 2023 on 8.6%q-o-q growth,almost doubling the 4.6%q-o-q expansion in Q2 2023.Emerging East Asian LCY bond issuance in Q3 2023 was equivalent to 81.5%of that of the US(USD3.1 trillion)and was over th

238、ree times that of the EU-20(USD0.8 trillion)during the same period.The PRC,ASEAN markets,and the Republic of Korea comprised 65.1%,19.7%,and 8.5%of total regional issuance in Q3 2023,respectively(Figure6).Government bond issuance surged 13.2%q-o-q to USD1.1 trillion in Q3 2023,following a 2.3%q-o-q

239、increase in Q2 2023,driven by higher issuance in thePRC.Government bond issuance accounted for 43.5%of the regional total,with the PRC comprising 87.2%of the regions total government bond issuance(Figure7).Issuance of government bonds in the PRC and ASEAN markets rose 15.5%q-o-q and 0.8%q-o-q,respec

240、tively.Meanwhile,government bond issuance in the Republic of Korea fell 12.9%q-o-q as the government had frontloaded its financing needs in the first half of the year.Central bank bond issuance rose 5.9%q-o-q in Q32023,driven by ASEAN markets.LHS=left-hand side,RHS=right-hand side.Notes:1.Data for t

241、he Republic of Korea and Malaysia are up to June 2023.2.Others include government institutions,individuals,securities companies,custodians,private corporations,and all other investors not elsewhere classified.3.The HerfindahlHirschman Index is a commonly accepted measure of market concentration.In t

242、his case,the index was used to measure the investor profile diversification of the local currency bond markets and is calculated by summing the squared share of each investor group in the bond market.Sources:Peoples Republic of China(CEIC Data Company);Indonesia(Directorate General of Budget Financi

243、ng and Risk Management,Ministry of Finance);Republic of Korea(Bank of Korea);Malaysia(Bank Negara Malaysia);Philippines(Bureau of the Treasury);Thailand(Bank of Thailand);and Viet Nam(Ministry of Finance).Figure 5:Investor Profiles of Local Currency Treasury Bonds in Select Emerging East Asian Marke

244、ts05,5004,7003,9003,1002,3001,500%IndexBanks(LHS)Foreign holders(LHS)Insurance and pension funds(LHS)Mutual funds(LHS)Central bank(LHS)Others(LHS)China,Peoples Rep.ofIndonesiaKorea,Rep.ofMalaysiaPhilippinesThailandViet NamJun-23Sep-23Sep-21Dec-21Dec-22Mar-22Mar-23Jun-22Sep-22Jun-23Sep-23S

245、ep-21Dec-21Dec-22Mar-22Mar-23Jun-22Sep-22Jun-23Sep-23Sep-21Dec-21Dec-22Mar-22Mar-23Jun-22Sep-22Jun-23Sep-23Sep-21Dec-21Dec-22Mar-22Mar-23Jun-22Sep-22Jun-23Sep-23Sep-21Dec-21Dec-22Mar-22Mar-23Jun-22Sep-22Jun-23Sep-21Dec-21Dec-22Mar-22Mar-23Jun-22Sep-22Jun-23Sep-21Dec-21Dec-22Mar-22Mar-23Jun-22Sep-22H

246、erfindahlHirschman Index(RHS)ASEAN=Association of Southeast Asian Nations,EEA=emerging East Asia,LCY=local currency,LHS=left-hand side,Q1=first quarter,Q2=second quarter,Q3=third quarter,Q4=fourth quarter,RHS=right-hand side,USD=United States dollar.Notes:1.For the Peoples Republic of China,Q3 2023

247、bonds issuance data are based on AsianBondsOnline estimates.2.ASEAN comprises the markets of Indonesia,Malaysia,the Philippines,Singapore,Thailand,and Viet Nam.3.Figures were computed based on 30 September 2023 currency exchange rates and do not include currency effects.Source:Peoples Republic of Ch

248、ina(CEIC Data Company);Hong Kong,China(Hong Kong Monetary Authority);Indonesia(Bank Indonesia;Directorate General of Budget Financing and Risk Management,Ministry of Finance;and Indonesia Stock Exchange);Republic of Korea(Bank of Korea and KG Zeroin Corporation);Malaysia(Bank Negara Malaysia);Philip

249、pines(Bureau of the Treasury and Bloomberg LP);Singapore(Monetary Authority of Singapore and Bloomberg LP);Thailand(Bank of Thailand and Thai Bond Market Association);and Viet Nam(Vietnam Bond Market Association and Bloomberg LP).Figure 6:Local Currency Bond Issuance in Select Emerging East Asian Ma

250、rkets3.02.52.01.51.00.50.0302520151050Q12021Q2Q3Q4Q12022Q2Q3Q4Q12023Q2Q3USD trillionShare of total(%)Korea,Rep.of(LHS)China,Peoples Rep.of(LHS)Hong Kong,China(LHS)ASEAN(LHS)ASEAN Share of EEA LCY Bond Issuance(RHS)Bond Market Developments in the Third Quarter of 202317LCY corporate bond issuance tot

251、aled USD0.9 trillion in Q3 2023 on moderating growth of 5.0%q-o-q compared to 12.5%q-o-q in Q2 2023.LCY corporate bond issuance accounted for 35.4%of total LCY bond issuance in emerging East Asia(Table 2).In four out of nine markets in the region,less corporate bond issuance was observed during the

252、quarter due to high borrowing costs amid expectations that the US Federal Reserve would keep higher interest rates longer than previously anticipated.The PRC,the Republic of Korea,and ASEAN accounted for 77.0%,16.0%,and 3.3%of the regions total LCY corporate bond issuance,respectively,on q-o-q growt

253、h of 6.5%,3.8%,and 0.2%.The majority(55.6%)of regional Treasury bond issuance in Q3 2023 carried tenors of more than 5years(Figure 8a).In Viet Nam,the Philippines,and the Republic of Korea,over 80%of Treasury issuance carried maturities of over 5 years during the quarter(Figure8b).The size-weighted

254、tenor of Treasury bonds issued during the quarter marginally declined to 6.3 years from 6.7 years in Q2 2023.Section 3.Intra-Regional Bond Issuance Emerging East Asian intra-regional bond issuance inched up to USD13.8 billion in Q3 2023 from USD13.0billion in Q2 2023 on growth of 6.2%q-o-q(Figure9).

255、4 Driven by the Republic of Korea,intra-regional bond issuance in Q3 2023 increased 75.5%from USD 7.8 billion in Q3 2022.Intra-regional bond issuance from the Republic of Korea increased more than eightfold in Q3 2023 from USD0.8 billion in the previous quarter.The next largest q-o-q gains in intra-

256、regional bond issuance in Q3 2023 came from the LaoPeoples Democratic Republic and the PRC with growth of 89.7%and 73.3%,respectively.Meanwhile,in HongKong,China and Malaysia,intra-regional bond issuance decreased 39.1%q-o-q and 69.6%q-o-q,respectively.HongKong,China remained the regions largest iss

257、uer of intra-regional bonds with total issuance of USD7.1billion in Q3 2023,accounting for 51.9%of the regional total.Among corporate issuers in the region,HyundaiCommercial,a corporate financing company domiciled in the Republic of Korea,issued a USD5.5billion 2-year bond denominated in Chinese yua

258、n,making it the single-largest issuance during the quarter and accounting for 39.8%of the regional total.CNY-denominated issuance and issuance from the financial sector dominated intra-regional bond issuance in Q3 2023.CNY-denominated issuance equivalent to USD12.6 billion accounted for 91.9%of the

259、regional total(Figure 10).Issuances denominated in Hong Kong dollars,Korean won,Singapore dollars,and Thai baht collectively accounted for 8.1%of the total intra-regional issuance in emerging East Asia.By sector,issuance from the financial sector comprised 69.7%of the regional total in Q3 2023 with

260、aggregate issuance of USD9.6 billion,nearly three times the issuance of USD3.4 billion in Q2 2023.The transportation sector was the second-largest issuer of intra-regional bonds with USD1.4 billion(10.0%regional share),which was down from USD3.0 billion in the previous quarter.The utilities and real

261、 estate sectors,whose issuances increased during the quarter,were the third-and fourth-largest sources of intra-regional bonds in Q3 2023,respectively,accounting for 6.6%and 5.5%of the regional total.ASEAN=Association of Southeast Asian Nations;HKG=Hong Kong,China;KOR=Republic of Korea;PRC=Peoples R

262、epublic of China.Note:ASEAN comprises the markets of Indonesia,Malaysia,the Philippines,Singapore,Thailand,and Viet Nam.Source:AsianBondsOnline calculations based on various local sources.Figure 7:Local Currency Bond Issuance by Economy and Type of Bond in the Third Quarter of 2023HKGKORPRCTreasury

263、and Other GovernmentCentral BankCorporateASEAN4Intra-regional bond issuance is defined as emerging East Asian bond issuance denominated in a regional currency excluding the issuers home currency.18Asia Bond Monitor November 2023Table 2:Local-Currency-Denominated Bond IssuanceQ3 2022Q2 2023Q3 2023Gro

264、wth Rate(%)Amount(USD billion)%shareAmount(USD billion)%shareAmount(USD billion)%shareQ3 2023q-o-q y-o-yChina,Peoples Rep.of Total1,443100.01,488100.01,650100.011.5 17.2 Treasury and Other Government80455.783756.296058.215.5 22.4 Central Bank00.000.000.0 Corporate63944.365143.868941.86.5 10.7 Hong K

265、ong,China Total160100.0156100.0168100.07.8 5.1 Treasury and Other Government63.910.874.4515.8 19.4 Government12376.812781.712775.6(0.3)3.3 Corporate3119.32717.63420.022.9 9.0 Indonesia Total44100.023100.026100.016.1(39.7)Treasury and Other Government1839.81043.41347.927.9(27.4)Central Bank2352.01252

266、.01141.5(7.4)(51.9)Corporate48.314.6310.6168.3(22.6)Korea,Rep.of Total165100.0237100.0215100.0(7.2)23.2 Treasury and Other Government4225.75523.24721.7(12.9)4.4 Central Bank1911.23012.72511.7(14.3)28.3 Corporate10463.115264.214366.5(3.8)29.9 Malaysia Total26100.025100.037100.053.7 48.8 Treasury and

267、Other Government1560.01353.61232.6(6.5)(19.1)Central Bank0.93.5310.51642.3520.8 1,695.2 Corporate936.5935.9925.07.2 2.2 Philippines Total49100.039100.042100.09.6(17.0)Treasury and Other Government1837.51026.31024.62.5(45.5)Central Bank2858.22870.73173.714.3 5.2 Corporate24.413.00.71.7(38.8)(68.5)Sin

268、gapore Total269100.0310100.0324100.05.4 14.7 Treasury and Other Government2910.73410.83510.85.5 15.9 Central Bank23788.327688.828888.95.5 15.5 Corporate31.01.20.410.3(17.3)(66.1)Thailand Total59100.070100.061100.0(10.0)1.0 Treasury and Other Government1626.91825.51524.0(15.4)(9.8)Central Bank2848.03

269、549.83354.0(2.3)13.8 Corporate1525.21724.71322.0(19.9)(11.9)Viet Nam Total29100.03100.08100.0144.6(71.7)Treasury and Other Government26.6382.7226.5(21.6)13.6 Central Bank2586.300.0447.4(84.4)Corporate27.10.617.3226.2269.0 4.3 Emerging East Asia Total2,243100.02,352100.02,532100.08.613.4 Treasury and

270、 Other Government95142.498141.71,10243.513.2 17.8 Central Bank48421.651021.753521.15.9 7.2 Corporate80836.086136.689635.45.0 12.1 Japan Total373100.0380100.0378100.03.1 4.5 Treasury and Other Government34792.934991.934089.90.8 1.1 Central Bank00.000.000.0 Corporate267.1318.13810.128.4 49.3()=negativ

271、e,=not applicable,Q2=second quarter,Q3=third quarter,q-o-q=quarter-on-quarter,USD=United States dollar,y-o-y=year-on-year.Notes:1.For the Peoples Republic of China,Q3 2023 bonds issuance data are based on AsianBondsOnline estimates.2.Data reflect gross bond issuance.3.Bloomberg LP end-of-period loca

272、l currencyUSD rates are used.4.Growth rates are calculated from a local currency base and do not include currency effects.For emerging East Asia,growth figures are based on 30 September 2023 currency exchange rates and do not include currency effects.Source:Peoples Republic of China(CEIC Data Compan

273、y);Hong Kong,China(Hong Kong Monetary Authority);Indonesia(Bank Indonesia,Directorate General of Budget Financing and Risk Management,Ministry of Finance;and Indonesia Stock Exchange);Republic of Korea(Bank of Korea and KG Zeroin Corporation);Malaysia(Bank Negara Malaysia);Philippines(Bureau of the

274、Treasury and Bloomberg LP);Singapore(Monetary Authority of Singapore and Bloomberg LP);Thailand(Bank of Thailand and ThaiBMA);Viet Nam(Vietnam Bond Market Association and Bloomberg LP);and Japan(Japan Securities Dealers Association).Bond Market Developments in the Third Quarter of 202319HKG=Hong Kon

275、g,China;INO=Indonesia;KOR=Republic of Korea;MAL=Malaysia;PHI=Philippines;PRC=Peoples Republic of China;Q1=first quarter;Q2=second quarter;Q3=third quarter;Q4=fourth quarter;SIN=Singapore;THA=Thailand;VIE=Viet Nam.Notes:1.Figures were computed based on 30 September 2023 currency exchange rates and do

276、 not include currency effects.2.Treasury bonds are local-currency-denominated fixed-income securities with maturities longer than 1 year and issued by the national government.Source:AsianBondsOnline calculations based on various local sources.Figure 8:Maturity Structure of Local Currency Treasury Bo

277、nd Issuance in Emerging EastAsiaa.Quarterly Maturity Structureb.Maturity Structure by Market,Q3 20230Q12021Q2Q3Q4Q12022Q2Q2Q3Q3Q4Q120233 to 5 years1 to 3 years5 to 10 years10 years%Share of bond tenors 5 years0PRCHKGINOKORMALPHISINTHAVIE3 to 5 years1 to 3 years5 to 10 years10 y

278、ears%CAM=Cambodia;HKG=Hong Kong,China;INO=Indonesia;KOR=Republic of Korea;LAO=Lao Peoples Democratic Republic;MAL=Malaysia;PRC=Peoples Republic of China;Q1=first quarter;Q2=second quarter;Q3=third quarter;Q4=fourth quarter;SIN=Singapore;THA=Thailand;USD=UnitedStates dollar.Source:AsianBondsOnline ca

279、lculations based on Bloomberg LP data.Figure 9:Intra-Regional Bond Issuance in Select Emerging East Asian Economies1612840Q32021Q4Q12022Q2Q3Q4Q12023Q2Q3KORHKGMALSINLAOTHAINOCAMPRCUSD billionFigure 10:Intra-Regional Bond Issuance in Emerging East Asia by Economy,Currency,and Sector in the ThirdQuarte

280、r of 2023CNY=Chinese yuan;HKD=Hong Kong dollar;HKG=Hong Kong,China;KOR=Republic of Korea;KRW=Korean won;LAO=Lao Peoples Democratic Republic;MAL=Malaysia;PRC=Peoples Republic of China;SGD=Singapore dollar;SIN=Singapore;THB=Thai baht.Source:AsianBondsOnline calculations based on Bloomberg LP data.HKGK

281、ORLAOMALPRCSINTHBKRWSGDHKDCNYConsumerEnergyFinanceIndustrialReal EstateSovereignTransportUtilities20Asia Bond Monitor November 2023EUR=euro,JPY=Japanese yen,USD=United States dollar.Notes:1.Emerging East Asia is defined to include member states of the Association of Southeast Asian Nations(ASEAN)plu

282、s the Peoples Republic of China;HongKong,China;and the Republic of Korea.2.G3 currency bonds are denominated in either euros,Japanese yen,or UnitedStatesdollars.3.Figures were computed based on 30 September 2023 currency exchange rates and do not include currency effects.Source:AsianBondsOnline calc

283、ulations based on Bloomberg LP data.Figure 11:Monthly G3 Currency Bond Issuance in Select Emerging East Asian MarketsUSD billionSep2022OctNovDecJan2023FebMarAprMayJunJulAugSep3528211470USDEURJPYASEAN=Association of Southeast Asian Nations;HKG=Hong Kong,China;INO=Indonesia;KOR=Republic of Korea;MAL=M

284、alaysia;PRC=Peoples Republic of China;SIN=Singapore;THA=Thailand.Note:G3 currency bonds are denominated in either euros,Japanese yen,or United States dollars.Source:AsianBondsOnline calculations based on Bloomberg LP data.Figure 12:G3 Currency Bond Issuance in Emerging EastAsia in the Third Quarter

285、of 2023HKG9.5%KOR37.1%PRC37.9%INO1.6%MAL5.9%SIN4.0%THA3.9%ASEAN15.5%for 15.5%of the regional total(Figure 12).Malaysia and Singapore posted the largest G3 currency bond issuances among ASEAN markets,issuing USD2.4 billion and USD1.6 billion,respectively,while no G3currency bonds were issued in the m

286、arkets of Cambodia,theLaoPeoplesDemocraticRepublic,thePhilippines,andViet Nam.Section 5.Yield Curve Movements From 1 September to 10 November,bond yield curves rose for nearly all markets in emerging EastAsia.Yields gained following the rise in US yields after the FederalReserve indicated that it wo

287、uld hold interest rates elevated for longer than previously indicated.Inaddition,the region is seeing an uptick in inflation amid signs that commodity prices are increasing(Figure 13).Section 4.G3 Currency Bond IssuanceG3 currency bond issuance in emerging East Asia reached USD41.1 billion in Q3 202

288、3,up 10.2%from the USD37.3 billion issued in Q2 2023(Figure 11).However,this was 11.7%lower than total quarterly issuance a year earlier as USD-denominated issuances,representing 91.9%of the regions G3 currency bond issuance in Q32023,declined 13.3%y-o-y.The PRC regained its position as the largest

289、issuer of G3 currency bonds in emerging East Asia during the quarter.Issuance of G3 currency bonds from ASEAN markets contracted 11.1%q-o-q to USD6.4 billion,accounting Bond Market Developments in the Third Quarter of 202321()=negative.Sources:Based on data from Bloomberg LP and Thai Bond Market Ass

290、ociation.Figure 13:Benchmark Yield CurvesLocal Currency Government BondsTime to maturity(years)Time to maturity(years)Time to maturity(years)Time to maturity(years)United StatesYield(%)Yield(%)Yield(%)European UnionJapan0482048121620 24 283236 40 44036912151821Hong Kong,ChinaYield(%)5.44.

291、74.03.32.64.03.53.02.52.02.41.60.80.0(0.8)5.95.34.74.13.50482Yield(%)1-Sep-2310-Nov-23Time to maturity(years)0482China,Peoples Rep.ofYield(%)3.42.92.41.91.4Time to maturity(years)05101520 253035 40 45 5055Korea,Rep.of4.13.93.73.53.3Yield(%)Time to maturity(years)0482

292、Malaysia5.04.43.83.22.6Yield(%)Time to maturity(years)0482Yield(%)Thailand4.33.62.92.21.5Time to maturity(years)0246810121416Yield(%)Viet Nam3.32.82.31.81.3Time to maturity(years)Yield(%)4.54.03.53.02.5Singapore0482Time to maturity(years)0482Yield(%)Indonesia7.26.96.

293、66.36.0Time to maturity(years)03697Philippines7.26.76.25.75.2Yield(%)Recent Developments in ASEAN+3 Sustainable Bond Marketsmarket,accounting for 37.1%of the global sustainable bonds outstanding at the end of September,followed by ASEAN+3 at 18.9%(Figure 14).Despite its continued expansio

294、n,ASEAN+3s sustainable bond market only comprised 2.0%of the regions general bond market,lagging the EU-20s corresponding share of 6.7%.Sustainable bond markets in ASEAN+3 and the EU-20 are dominated by green bonds and local currency(LCY)financing.ASEAN+3s sustainable bond market largely comprises g

295、reen bonds(63.6%)and LCY financing(65.6%)(Figure 15).In the EU-20,green bonds account for a similar share(63.2%),while LCY financing is even more prevalent(89.9%).In terms of average maturity,however,ASEAN+3s sustainable bond market is dominated by short-term financing,with bonds carrying 5 ASEAN+3

296、is defined to include member states of the Association of Southeast Asian Nations(ASEAN)plus the Peoples Republic of China;Hong Kong,China;Japan;and theRepublicof Korea.Sustainable bonds outstanding in ASEAN+3 markets climbed to USD734.1 billion at the end of September,buoyed by robust issuance in t

297、he third quarter(Q3).5 The regional sustainable bond market expanded 33.6%year-on-year and 5.2%quarter-on-quarter(q-o-q)in Q3 2023,up from the 31.3%year-on-year and 5.0%q-o-q hikes posted in the second quarter(Q2)of 2023.The 5.2%q-o-q growth in Q3 2023 was the fastest q-o-q expansion among major reg

298、ional sustainable bond markets around the world and surpassed the EuropeanUnions(EU-20)2.6%q-o-q growth.This was largely fueled by ASEAN+3s sustainable bond issuance of USD57.3 billion in Q3 2023,which topped all other regions during the quarter.However,the EU-20 continues to be the worlds largest s

299、ustainable bond ASEAN+3=Association of Southeast Asian Nations plus the Peoples Republic of China;Hong Kong,China;Japan;and the Republic of Korea;EU=European Union;LHS=left-hand side;RHS=right-hand side;USD=United States dollar.Notes:1.EU-20 includes EU member markets Austria,Belgium,Croatia,Cyprus,

300、Estonia,Finland,France,Germany,Greece,Ireland,Italy,Latvia,Lithuania,Luxembourg,Malta,the Netherlands,Portugal,Slovakia,Slovenia,and Spain.2.Data include both local currency and foreign currency issues.Source:AsianBondsOnline calculations based on Bloomberg LP data.Figure 14:Global Sustainable Bonds

301、 Outstanding4.23.52.82.11.40.70.024201612840JunDecSep2019DecJunDecJunDecJunSepSepSepSepMar2020Mar2021Mar2022Mar2023USD trillionShare of total(%)Rest of the World(LHS)Supranationals(LHS)EU-20(LHS)ASEAN+3(LHS)North America(LHS)Other Asian Markets(LHS)ASEAN+3 Share of Global Sustainable Bonds Outstandi

302、ng(RHS)ASEAN=Association of Southeast Asian Nations;FCY=foreign currency;HKG=Hong Kong,China;JPN=Japan;KOR=Republic of Korea;LCY=local currency;PRC=Peoples Republic of China.Notes:1.ASEAN+3 is defined to include member states of the Association of Southeast Asian Nations(ASEAN)plus the Peoples Repub

303、lic of China;HongKong,China;Japan;and the Republic of Korea.2.ASEAN comprises the markets of Cambodia,Indonesia,the Lao Peoples Democratic Republic,Malaysia,the Philippines,Singapore,Thailand,and VietNam.Source:AsianBondsOnline calculations based on Bloomberg LP data.Figure 15:Market Profile of Outs

304、tanding ASEAN+3 Sustainable Bonds at the End of September 2023TransitionSustainability-LinkedSustainabilityASEANHKGJPNKORPRCCorporateGovernment13 years35 years510 years10 yearsPerpetualsLCYFCYSocialGreenRecent Developments in ASEAN+3 Sustainable Bond Markets23maturities of5years or less accounting f

305、or 74.8%of total outstanding sustainable bonds at the end of September,while the average maturity of the EU-20s sustainable bond stock is much longer,with bonds with maturities of more than 5 years accounting for 60.2%of the total(Figure16).At the end of September,the weighted average tenor in the A

306、SEAN+3 sustainable bond market stood at 4.5years compared with 8.6 years for the EU-20 market.This highlights the need for further policy actions and initiatives to expand ASEAN+3s sustainable bond market by increasing LCY financing and long-term financing.ASEAN+3 sustainable bond issuance remained

307、strong despite headwinds in global financial markets.Total sustainable bond issuance reached USD57.3billion during Q3 2023,the most issuance among all regional sustainable bond markets during the quarter and accounting for 36.3%of the global total,though this was less than USD69.2 billion of issuanc

308、e in Q22023(Figure 17).Q32023 issuance of sustainability and sustainability-linked bonds rose 53.2%and 124.1%,repsectively,from the prior quarter,led by issuances from Japan,thePeoplesRepublic of China,and the RepublicofKorea.In Q32023,Japan was the largest issuer of sustainable bonds in the region,

309、accounting for 36.5%of the ASEAN+3 total,and up from its share of 20.2%in Q22023.ASEANs contribution to the regional issuance total climbed to 7.4%in Q3 2023 from 4.6%in Q2 2023 and was much larger than its 2.3%share in ASEAN+3s general bond market during the quarter.ASEAN sustainable bond issuance

310、climbed 32.7%q-o-q in Q32023,buoyed by government issuances from Singapore and Thailand.In August,the Government of Singapore raised SGD2.8 billion from the sale of 50-year green bonds.The Governments of Thailand and,to a lesser extent,Indonesia both included auctions for sustainable bonds in their

311、scheduled Treasury auctions.Sustainable bond issuance in ASEAN+3 is dominated by LCY-denominated issuance,representing 69.5%of the total issuance during Q3 2023(Figure 18).Theshare of LCY financing in the ASEAN+3 sustainable bond market still lags that in ASEAN+3s general bond market(95.8%)and the E

312、U-20s sustainable bond market(85.8%).This suggests that ASEAN+3s sustainable bond market needs further development to facilitate more LCY financing.During the quarter,however,all sustainable bond issuances in ASEAN markets were denominated in domestic currencies.In contrast,Hong Kong,China had 60.6%

313、of its sustainable bond issuance denominated in foreign currency during the quarter.ASEAN+3=Association of Southeast Asian Nations plus the Peoples Republic of China;Hong Kong,China;Japan;and the Republic of Korea;LHS=left-hand side;Q1=first quarter;Q2=second quarter;Q3=third quarter;Q4=fourth quart

314、er;RHS=right-hand side;USD=United States dollar.Note:Data include both local currency and foreign currency issues.Source:AsianBondsOnline calculations based on Bloomberg LP data.Figure 17:ASEAN+3 Sustainable Bond Issuance and Share of the Global Total7560453090USD billionShare of total(%)

315、Transition Bonds(LHS)Sustainability Bonds(LHS)Green Bonds(LHS)Social Bonds(LHS)Sustainability-Linked Bonds(LHS)ASEAN+3 Share of Global Sustainable Bond Issuance(RHS)Q32019Q4 Q12020Q2 Q3 Q4 Q12021Q2 Q3 Q4 Q12022Q2Q2Q3Q3Q4 Q12023ASEAN+3=Association of Southeast Asian Nations plus the Peoples Republic

316、of China;Hong Kong,China;Japan;and the Republic of Korea;EU=European Union.Notes:1.EU-20 includes EU member markets Austria,Belgium,Croatia,Cyprus,Estonia,Finland,France,Germany,Greece,Ireland,Italy,Latvia,Lithuania,Luxembourg,Malta,the Netherlands,Portugal,Slovakia,Slovenia,and Spain.2.Data include

317、 both local currency and foreign currency issues.Source:AsianBondsOnline calculations based on Bloomberg LP data.Figure 16:Maturity Profiles of ASEAN+3 and EU-20 Sustainable Bonds Outstanding at the End of September 20230%ASEAN+3GreenSocialTransitionSustainabilitySustainability-LinkedEU-2

318、0ASEAN+3EU-20ASEAN+3EU-20ASEAN+3EU-20ASEAN+3EU-2010 years1 to 3 years5 to 10 years3 to 5 yearsPerpetualsEU-20 shareof bond tenors5 years=60.2%ASEAN+3 shareof bond tenors5 years=25.2%24Asia Bond Monitor November 2023Short-term and private sector issuances were more prevalent in the ASEAN+3 sustainabl

319、e bond market in Q3 2023.68.1%of all sustainable bond issuance in Q32023 had tenors of 5 years or less,with 42.1%carrying maturities of 3 years or less.In contrast,65.1%of EU-20 sustainable bond issuance during the quarter had tenors of over 5 years.With Singapores issuance of a SGD2.8billion bond w

320、ith a 50-year tenor,the weighted-average tenor of ASEAN+3 sustainable bond issuance in Q3 2023 was 7.2 years,which was broadly comparable with 7.6 years for the EU-20 market.Meanwhile,private sector issuance accounted for 69.8%of ASEAN+3 sustainable bond issuance during the quarter,much higher than

321、the corresponding share of 33.1%in ASEAN+3s general bond market.ASEAN markets demonstrated a different pattern,with 81.5%and 88.5%of sustainable bond issuance in Q3 2023 coming from the public sector and comprising tenors of over 5years,respectively.ASEAN=Association of Southeast Asian Nations;FCY=f

322、oreign currency;HKG=Hong Kong,China;JPN=Japan;KOR=Republic of Korea;LCY=local currency;PRC=Peoples Republic of China.Notes:1.ASEAN+3 is defined to include member states of ASEAN plus the Peoples Republic of China;HongKong,China;Japan;and the Republic of Korea.2.ASEAN comprises the markets of Indones

323、ia,Malaysia,the Philippines,Singapore,Thailand,and Viet Nam.Source:AsianBondsOnline calculations based on Bloomberg LP data.Figure 18:Market Profile of ASEAN+3 Sustainable Bond Issuance in the Third Quarter of 2023TransitionSustainability-LinkedSustainabilityASEANHKGJPNKORPRCCorporateGovernment13 ye

324、ars35 years510 years10 yearsPerpetualLCYFCYSocialGreenPolicy and Regulatory DevelopmentsPeoples Republic of ChinaThe Peoples Bank of China Cuts Reserve Requirement RatioOn 14 September,the Peoples Bank of China announced that it would cut the reserve requirement ratio of financial institutions by 25

325、 basis points,effective 15 September.The central bank estimated that the move would reduce the weighted average reserve requirement ratio of financial institutions to 7.4%.The Peoples Republic of China Announces CNY1.0 trillion of Special Bond IssuanceOn 25 October,the Peoples Republic of China anno

326、unced that it would issue an additional CNY1.0trillion of government bonds to help support fiscal stimulus measures.Under the plan,the proceeds of the government bonds will be transferred to local government units.In addition,the government raised its budget deficit target for 2023 from 3.0%to3.8%.H

327、ong Kong,ChinaHong Kong Monetary Authority Announces Government Bond Issuance Schedule On 16 October,the Hong Kong Monetary Authority announced the tentative issuance schedule for HongKong Special Administrative Region government bonds for the 6-month period between October 2023 and March 2024.The s

328、chedule listed seven issuances of bonds with tenors ranging from 1 year to 20 years,and a total issuance size of HKD14 billion.The monetary authority noted that the schedule and issuance details may be adjusted based on market conditions.IndonesiaBank Indonesia Commences Sale of New Monetary Operati

329、on InstrumentOn 15 September,Bank Indonesia held its first auction of Bank Indonesia Rupiah Securities(SRBI),a new monetary operation instrument that utilizes the central banks holdings of government bonds as the underlying asset.The new instrument aims to deepen the money market,attract foreign cap

330、ital flows,and optimize the government bond holdings of Bank Indonesia.The SRBI will be denominated in Indonesian rupiah and offered in maturities of 6 months,9 months,and 12 months.Both domestic and foreign investors can participate in SRBI trades in the secondary market.The initial auction was wel

331、l-received,attracting bids amounting to IDR29.9trillion versus a target of IDR7.0 trillion.Indonesian Parliament Approves 2024 State BudgetIn September,the Indonesian Parliament approved the governments proposed 2024 state budget,which projects state revenue at IDR2,802.3 trillion,while expenditures

332、 are programmed at IDR3,325.1 trillion.The 2024 budget was higher by about 6.5%compared with the 2023 budget and estimates a deficit equivalent to 2.3%of gross domestic product(GDP).Among the underlying macroeconomic assumptions for the budget include (i)GDP growth of 5.2%,(ii)an inflation rate of 2

333、.8%,and(iii)an exchange rate of IDR15,000USD1.26Asia Bond Monitor November 2023Republic of KoreaThe Bank of Korea,Financial Services Commission,and the Financial Supervisory Service Announce Central Bank Digital Currency Pilot Project On 4 October,the Bank of Korea,the Financial Services Commission,and the Financial Supervisory Service announced the Central Bank Digital Currency(CBDC)pilot project