Asian bonds drew their biggest foreign inflow in seven months in June, as lower oil prices and strong technology demand improved the outlook for the region and equity-market concerns drove investors towards safer fixed-income assets.
Foreign investors bought a net $11.51 billion worth of regional bonds in South Korea, Indonesia, Malaysia, Thailand and India, the largest monthly net purchase since November 2025, data from local regulators and bond market associations showed.
A drop in crude prices last month from four-year highs eased inflationary pressures in major Asian oil importers. Brent crude fell 20.8% in June and hit a four-month low, helping sentiment even though prices have rebounded as the Middle East conflict has intensified again.
The global AI boom, which has supported manufacturing across Asia, also lifted sentiment. Countries including China, Japan and South Korea saw factory activity expand last month as demand for technology-related goods rose.
South Korean bonds recorded net foreign inflows of $2.2 billion, their seventh monthly cross-border inflow in eight.
Indian bonds saw net foreign purchases of $3.24 billion, the largest monthly inflow since June 2017, after New Delhi scrapped capital gains tax on income from interest or sales of government securities for overseas investors.
Indonesian bonds attracted a net $5.5 billion, the largest cross-border inflow since May 2024.
"Most of those inflows were into SRBI, or Sekuritas Rupiah Bank Indonesia," said Khoon Goh, head of Asia research at ANZ.
"This suggests that investors continue to be attracted by Indonesia's relatively high yields."
Malaysian bonds drew $1.21 billion worth of inflows, while foreigners sold a net $627 million of Thai bonds.
